The Electricity Supply Industry Super fund has dramatically increased its private equity and infrastructure exposure with five new mandates, while it also awarded a new mandate in emerging markets, and a mandate switch away from the Australian equities fund of Suncorp Investment Management.
The $2.7 billion fund has made a big jump in commitments to private equity and infrastructure funds in the last nine months to “expand the manager line-up away from the traditional public markets and increase exposure to markets uncorrelated to them”, according to ESI Super fund secretary Matthew Griffith. Total commitments of the super fund to alternatives have increased to $450 million, to be drawn down over the next few years, Griffith said. The current exposure was around $230 million, or 8.5 per cent of the total fund. Nine months ago it was around 5.5 per cent of the fund. ESI Super has made commitments to Barclay Global Investors, Macquarie Group Infrastructure, Quay Australia Fund IV, Russell Global Property and AMP Infrastructure Equity Fund. Meanwhile, the Queensland-based fund has also made a $50 million mandate to AMP emerging markets fund. It was the first direct mandate to an emerging markets fund, although it already has some exposure through the AMP extended markets fund, which has a 35 per cent allocation to emerging markets. More recently, ESI Super pulled a mandate from Suncorp’s Australian equities fund following the departure last December of the nine-man investment team, led by Denis Donohue, to set up Pinnacle-owned boutique manager Solaris Investment Management. The $110 million Australian equities mandate was given to the BT Australian Share ‘Focus’ fund after only five months with Suncorp. Griffith said the fund was impressed with BT’s “discipline around idea generation and stock selection”, as well as the team itself, led by Crispin Murray.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
