Executives at Australia’s superannuation funds — a segment that has hit $2.6 trillion in assets and is growing — see room to grow their investments in the United States in the coming years.
“As we continue this rapid growth, we naturally need to invest overseas... And so that certainly has played out in our portfolios,” Deanne Stewart, CEO of A$170 billion ($106.6 billion) Aware Super, Sydney, said in a panel discussion on Feb. 27 in New York. The panel discussion, titled “The trillion-dollar decade: Australian superannuation capital looks to America,” formed part of the Australian Superannuation Investment Summit that began in Washington D.C. earlier this week.
“So, we are overweight global and therefore, by that very nature, overweight the U.S.," she said, adding that about 31% of the super fund's entire allocation is invested in the U.S.
Stewart said that accounts for just under A$60 billion, with about A$45 billion in listed equities, A$5 billion in private equity, about A$5 billion in infrastructure and the rest in private credit.
Stewart noted that the average Australian superannuation fund has about 20% of its allocation in the U.S. and “that is likely to grow.” She expects to see that growth reflected in areas including private equity and infrastructure.
But Stewart added that one thing that superannuation funds hate is policy uncertainty, especially for investing in longer-term sectors like infrastructure.
The investment summit comes amid political uncertainty over the future of American tariffs under the administration of President Donald Trump, which could target Australian steel and aluminum.
Australian super funds currently have investments valued at $400 billion in the U.S. and that is expected to more than double over the next 10 years to over $1 trillion.
Mark Delaney, CIO of AustralianSuper, Melbourne — Australia’s largest super with over $225 billion in assets — said the U.S. has been through a period of exceptionalism and that “the U.S. has been the place to be.” The question, he said, is if it will be the place to be in the future, and “we think it’s good enough for a while.”
Delaney said he believes the U.S. and Australia are the two best places to invest and markets to focus on. “The U.S. is where a lot of innovation takes place, new ideas, new markets, opportunities, and we should be invested there as well,” he said.
David Anderson, CEO of the approximately $210 billion Australian Retirement Trust, Brisbane, said that 70 cents of every new cash flow dollar is ending up offshore, with about two-thirds of that heading to the U.S.
“About half of our private equity portfolio is in the U.S. Probably 16% of our infrastructure portfolio is in the U.S. So, I see an opportunity to raise up on infrastructure for sure,” he said. “And about a third of our real estate portfolio is in the U.S.”
Australia’s retirement plans are collectively valued at $2.6 trillion and represent the fourth largest retirement savings pool in the world, according to a factsheet provided at the investment summit.
