AustralianSuper begins a private equity revolution

AustralianSuper has made its first single-manager investment in offshore private equity.

Chief investment officer Mark Delaney said AustralianSuper had allocated $US100 million to Macquarie’s Global Opportunities Partners fund, kicking off its plans for a network of single managers to overlay its existing funds-of-funds program in private equity. The new approach will “complement” the present funds-of-funds structure by providing more access to different managers specialising in a variety of different sectors, Delaney said. “The sectors are fairly broad but different managers get access to different deals. It’s a very big market globally and we think having a couple of access points improves our ability to get a better portfolio,” he said. The $28 billion super fund has 0.5 per cent of total assets in international private equity, currently implemented through an Industry Funds Management international fund-of-funds. This exposure is likely to increase to as much as 4 per cent through the single manager program, which is a “multi-year” strategy according to Delaney. MGOP was identified directly by AustralianSuper, as opposed to being recommended by its recently appointed offshore private equity adviser, Hamilton Lane. Delaney said MGOP is seeking to raise $US2 billion from institutions, with aims of making 8 to 12 investments in businesses with privileged market positions, established business models, predictable cashflows, and available growth options. Delaney understands each investment will be between $US100 million and $US400 million each, with a focus on North American and European businesses. As a US-regulated fund, MGOP is in a blackout period while it is raising funds, meaning it cannot yet discuss its investment aims or partners. However listed company Macquarie Capital Alliance Group recently announced it had gone into partnership with MGOP to buy 45 per cent of global travel support service provider Universal Weather And Aviation Incorporated. MGOP funded $US80.5 million of the $US160 million acquisition.