Super funds look offshore as local opportunities wane

Posted by Anton Murray Consulting on 26 May, 2023


US-based asset manager Nuveen have announced that four Australian superannuation funds had invested US$190 million into its US Cities Workplace strategy. Nuveen confirmed that the funds in question included Cbus Super, Hostplus and TWUSUPER, and a fourth unnamed fund, and that their sizeable investment would offer them access to “diversification benefits” of investing in sectors not readily available in the Australian market. The US Cities Workplace strategy invests in alternative workplace assets – predominantly in the medical office, life science, technology R&D and studio production sectors – in US cities that are believed to be positioned for demographic and structural growth.

This investment, which has seen Australian funds branching out of the country in pursuit of diversification, comes amid increasing talk about the constraints local funds face. Namely, on a recent episode of Relative Return, the new podcast by Momentum Media, Mayflower Consulting chief executive officer Sarah Penn explained that superannuation funds don’t know what to do with the influx of funds being pushed their way. “Our funds now, the big ones, are bigger than sovereign wealth funds in a lot of other countries. AustralianSuper, for instance, sources a lot of their investments offshore. And in fact, the area where it’s even worse is ESG,” Ms Penn said.

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