US private equity fund-of-funds manager Lexington Capital Group has continued a successful 2006 in Australia, receiving a $26 million mandate from Queensland’s ESI Super.
The mandate from the $2.3 billion electricity supply industry fund, to Lexington’s secondaries fund-of-funds, is at least the third Australian mandate for the New York-based manager this year, after winning money from Vision Super and HESTA in recent months. According to ESI fund secretary, Errol Hay, the commitment to Lexington takes the fund’s exposure toward alternative investments to “a bit over 3 per cent”, meaning the fund needs more investments to reach its 5 per cent target benchmark. ESI has invested in private equity-style investments before, counting Hasting’s Private Capital Group infrastructure fund-of-funds, and Pantheon Ventures among its managers. ESI Super’s 17,000 members have high average account balances, and Hay said 40 per cent of the assets under management represented members who had left an electricity supply employer but kept their account with the fund.
The $34 billion Brighter Super is set to shift a significant proportion of equities assets in MySuper from passive to active management. Chief investment officer Mark Rider says the move is possible because of the scale created by mergers, and the fund will be looking to its newly appointed active managers to generate performance through the cycle by taking idiosyncratic risks.
Darcy SongJanuary 21, 2025
