AustralianSuper ratchets Up US expansion moves with new staff to be based in New York

One of the fastest-growing pension plans in the world is aiming to double its New York staff with peer plans expected to follow if the move proves successful.

New York City Skyline, where AustralianSuper is set to have more staff. Picture: iStock

AustralianSuper, one of the fastest-growing pension plans in the world, has moved a pair of top executives to New York and made several senior U.S. hires as it aims to become a major private-markets investor in North America.

The roughly $228 billion pension, Australia’s largest so-called superannuation fund, has moved former head of European private credit, Mikaël Limpalaër, to New York from London as head of the Americas.

Head of Private Credit Nick Ward has relocated to New York from the pension’s headquarters in Melbourne, Australia. Superannuation funds receive payments from employers and sometimes workers to provide retirement income, with contributions based on pay rates.

AustralianSuper opened a New York office in 2021 and now has around 60 people based there. It plans to double its staff in the city to 120 people by 2026, with a focus on expanding its $68 billion in North American holdings, around $19 billion of which is invested across U.S. private equity, private credit and real assets.

AustralianSuper’s aggressive expansion plans partly reflect the growth of its assets under management, which in turn is a function of the way superannuation plans are funded, Limpalaër said.

Workers in Australia must contribute 11.5 per cent of their salaries to a retirement, or superannuation, fund, either directly or through their employer, with the contribution level set to rise to 12 per cent next year.

A vast majority of AustralianSuper’s 3.4 million members are still of working age and the pension reinvests its profits, factors that are forecast to help drive its assets to around $300 billion within five years.

Australian Super Chief Executive Paul Schroder. Picture: Supplied

All that money gets invested and the plan has outgrown the Australian market, Limpalaër said.

“We’re long-term investors and are used to investing through economic and political cycles,” he said. “Without a very well-balanced and diversified portfolio, it is a tricky task.” In addition to the relocations, AustralianSuper has hired Damien Mitchell and Andrew Osborne as senior investment directors with its U.S. real assets team. Mitchell joined from investment manager CIM Group while Osborne came aboard from Saudi Arabia’s Public Investment Fund, a sovereign wealth investor. Also, Matthew Choi has been named as a senior investment director with the pension’s U.S. credit investing team, joining from Granite Point Mortgage Trust.

AustralianSuper has been looking to reduce its reliance on external fund managers by building in-house investment capabilities. The dual aim of this approach is to bring down management fees and to give the pension greater control over deals it backs.

Putting in-house leaders in a nexus of the private-equity and credit industry provides them with close proximity to the best external managers, many of whom are also based in New York. Being able to meet regularly face-to-face with fund sponsors helps ensure that AustralianSuper will be “the first one to get the call” when the best co-investment deals come to market, Limpalaër said.

AustralianSuper has committed capital to large U.S. private-equity managers including Vista Equity Partners, TPG and Advent International, as well as middle-market managers such as THL, according to its 2023 annual report.

AustralianSuper isn’t the country’s only pension whose rapid growth has led to overseas expansion. Aware Super, Australia’s third-largest plan with around $120 billion in assets under management, opened a London office last year and has talked of moving into the U.S.

Superannuation funds held A$3.9 trillion, or around $2.7 trillion, at the end of March, according to the Association of Superannuation Funds of Australia. By comparison, Australia’s gross domestic product came to $1.74 trillion last year.

Smaller superannuation funds, those with assets of less than A$100 billion, are taking a “wait and see” approach to international expansion, according to banking giant JPMorgan Chase’s 2023 The Future of Superannuation report. If moves by the largest plans succeed, more are likely to follow the trailblazers into the U.S., the bank concluded.