London’s biggest investors are seeking to tap the surge in appetite for infrastructure assets from Australia’s A$3.3 trillion ($2.3 trillion) of pension funds.
(Bloomberg) — London’s biggest investors are seeking to tap the surge in appetite for infrastructure assets from Australia’s A$3.3 trillion ($2.3 trillion) of pension funds.
That’s the message from Nicholas Lyons, Lord Mayor of the City of London, who’s in Australia to push UK investment opportunities. A report out Wednesday from the Association of Superannuation Funds of Australia shows that pensions’ infrastructure holdings have surged in recent years and now comprise 8% of their total assets.
“There is still a huge appetite to do business with the UK and to get assets and people into London,” the former investment banker said in an interview, adding that he’s using his trip to encourage more funds to set up offices in the city. “We want to step up the level of activity that exists so that we seize on these opportunities.”
Some of Australia’s biggest pension funds are already bolstering their overseas offices as they look to grow their presence in global markets, including a push into unlisted assets and private credit. Australia’s biggest pension fund, AustralianSuper Pty, has an office in London and last year bought a stake in one of the city’s biggest development projects at Canada Water.
Lyons will be addressing the country’s biggest pension funds at the ASFA conference in Brisbane starting Wednesday.
Behind Curve
Lyons recently floated the idea of a £50 billion fund to invest in UK private assets, targeting both domestic and eventually overseas investors. The fund would focus on FinTech, biotech and life sciences and renewable technologies.
Australian pensions have also ramped up their investments in renewables over the years, with holdings equivalent to about 5% of Australia’s renewable generation capacity, the ASFA analysis said.
Where Pensions With A$430 Billion Are Putting Their Money Now
Lyons does, however, think that Australian investors have more work to do on environmental, social and governance issues.
“I would characterize the Aussies as being a little bit behind the curve on the whole ESG area,” he said, adding it wasn’t surprising given the economy’s reliance on energy industries.
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