Media Super targets direct private equity investments

Media Super has appointed private markets specialist Quentin Ayers to provide advice about selecting private equity managers in Australia and overseas.

About 6 per cent of Media Super’s assets are currently invested in private equity funds-of-funds. Jon Glass, chief investment officer of the $2.7-billion industry fund, says it will not redeem these commitments as it invests with individual managers.

“We’re letting fund-of-fund [investments] run down in a natural way and will build a direct program to pick up the slack,” Glass says. “As investments run off you need to replace them with new ones.”

Gary Lines, an executive director of Quentin Ayers who will work closely with Media Super, says he and Glass aim to create a portfolio of “focused” private equity investments within three years. Further investments may follow.

“Private equity portfolios are notoriously slow to build,” Lines says. “It takes years to get a private equity portfolio up to critical mass and you have to keep investing to keep the program going.”

Roughly half of Media Super’s current private equity commitments are invested domestically and the remainder overseas.

Lines says the financial crisis has created opportunities across a range of strategies, from distressed situations to buy-outs in Australia and offshore, including emerging markets.

Frontier Investment Consulting, as the primary advisor to Media Super, will determine how much of the fund’s assets are committed to private equity, Glass says.

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