Australia’s largest pension fund has earmarked £18 billion for UK-based investments by the end of the decade.
With over A$300 billion (£154 billion) in retirement savings under management and 100 sets of boots already on UK soil, AustralianSuper is “very optimistic about the UK, especially in the long term” chief executive Paul Schroder told Bloomberg TV on Monday.
He cited digital, mixed-use property, infrastructure and energy transition as prime targets for investment.
AussieSuper’s big bet on UK investments comes at an opportunistic time, with the valuations of UK plcs having started to lag their US counterparts, with the London Stock Exchange failing to attract the same levels of capital it saw before Brexit.
Cheaper UK PLC valuations have led to a buying frenzy among private equity firms and a surge in take privates.
Takeover bids in the past year were on the lowest average value since before the pandemic, UK investment bank Peel Hunt recently calculated.
Last November, the gap between UK valuations and European and US valuations was found to have widened significantly since 2016, according to Bloomberg research.
AussieSuper’s Schroder sidestepped a question on the matter, saying “there’s 3.4 million members of the fund and they want us to create long-term value and you can’t get a longer term value than the UK in London”.
He said AussieSuper can “look over” the volatility in the short term.
The fund has existing mixed infrastructure investments in King’s Cross and Canada Water, though Schroder expressed caution on pure office developments in the post-Covid era.
AustralianSuper intends to triple its UK workforce by 2030.