Australia’s $54b pension fund seeks to expand private equity team

Deal Street Asia

Australia’s second-biggest pension fund is expanding its private-equity team as it plans to boost returns at a time of high valuations in stocks and low bond yields. MLC Ltd., which oversees more than A$70 billion ($54 billion) in pension assets, is looking to hire two PE fund managers who will be based outside Australia and will scout for investment opportunities, according to Chief Investment Officer Jonathan Armitage. This comes after David Seebold, who was previously in the Sydney PE team, was posted to New York as MLC looks to spend a cash pile that’s at the highest level since the financial crisis in some of its portfolios, Armitage said.

Armitage is scouring the globe for options on where to spend his next dollar as Australia’s pension pool, the world’s third largest, is forecast to grow to A$4 trillion within the next decade. With yields below zero on more than $10 trillion worth of bonds and global equity valuations close to all-time highs, MLC expects to increase its investments in private equity and other alternative assets in the next two years. “Returns from the private equity part of the portfolio continue to be very robust,” Sydney-based Armitage said in an interview Friday. “We’ve got what I would describe as a pretty healthy pipeline of potential investment opportunities.”

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