WORKERS CAPITAL
Australian $100 billion pension fund targets private assets with London launch

Story by By Lewis Jackson and Praveen Menon


SYDNEY (Reuters) - Australia's third-largest pension fund will officially open its first overseas outpost in London in November, a senior company official said, pushing for more private market investments as the sector outgrows the confines of home.

Aware Super, with A$160 billion ($102 billion) in assets, will set up in the district of St. James, popular with hedge funds and private equity firms, and plans to have a team of 14 by year end, according to Deputy Chief Investment Officer and Head of International Damien Webb, who will relocate to London in October.

Forecast to hit A$250 billion in assets by 2026, the fund plans to funnel "substantial" billions through the new office, which will initially focus on private equity, property and infrastructure in the UK, Europe and North America, Webb told Reuters.

"At 250 billion dollars and beyond I think we would start to challenge our (real asset) pipeline if we thought we could only do direct investments in Australia," said Webb. Real assets include property and infrastructure.

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"To originate and govern our own investments, we will need a presence overseas at that level of scale to source and manage...those investments."

Aware plans to roughly double offshore real asset exposure to 40% over the next three to five years.

International deals and offices in London or New York are becoming rites of passage for big players in Australia's A$2.4 trillion pension sector, which is swelling rapidly thanks to laws which set aside 11% of worker pay packets.

The country's biggest fund, AustralianSuper, recently poached senior executives from J.P. Morgan and BNP Paribas for its London office. In May, UniSuper paid A$1 billion for a stake in European telecom masts business Vantage Towers (VTWRn.DE).

Aware is "more than likely" to open a second office in North America in the next three to four years, Webb said.

($1 = 1.5676 Australian dollars)