By Paulina Duran
SYDNEY (Reuters) – AustralianSuper, the country’s largest pension fund, plans to open an office in New York next year and expand its operations in London as part of a strategy to invest in and directly manage more offshore assets, Chief Executive Officer Ian Silk said.
The fund, projected to reach A$300 billion (£164.5 billion) in assets in five years, is forecast to increase its allocation to overseas investments from about half to about 60% by 2024, Silk said at a business lunch organised by the Australian-Israeli Chamber of Commerce in Sydney on Friday.
“The next wave of change (for AustralianSuper) is going to be a much greater allocation offshore and a much greater direct investment,” Silk said.
“We will continue to be investing in Australia, its just the greater share of new money will be going offshore to protect the interests of members in the fund.”
Australia’s A$1.9 trillion economy has slowed sharply in the second half of last year, which is forcing the central bank to consider cuts to its benchmark rate from its already record low of 1.5%.
With A$160 billion in assets under management, and backed by Australia’s compulsory retirement savings system, the fund is already the country’s largest.
It has also been flooded with workers’ pension savings ever since a misconduct inquiry last year found some rival funds owned by the country’s biggest institutions had overcharged their members, Silk said.
AustralianSuper is part of the country’s not-for-profit industry fund network that are tied to unions and compete with commercial products run by the major banks and fund managers.
“We are establishing … a small number of reasonably substantial investment offices that would be principally be in the business of identifying investment opportunities, executing those and managing them,” Silk said.
In the next 12 months, the fund said it plans to grow its team in London to 50, from about eight staff currently, and open an office in New York, where it hopes to hire about 30 people in the next 3 years.
(Reporting by Paulina Duran in SYDNEY; Editing by Rashmi Aich)