MLC sells private equity assets

NATIONAL Australia Bank’s private wealth division, MLC, has sold a $750 million portfolio of private equity investments to Swiss-based Partners Group, trimming its PE allocation at a time when Partners is looking to expand its presence in Australia.

It is understood that MLC remains committed to its private equity book, and the sale is just an opportunistic move to bring its allocation back in line with long-term goals.

The sale was one of the largest of its type in the local market and more action in the space is expected in the near term.

Telstra Super recently carried out a similar portfolio reweighting, as a number of fund managers expressed dismay at the super sector’s limited commitment to private equity.

The nation’s super funds have been growing rapidly in recent years, but have slashed allocations to private equity due to high fees, the illiquid nature of investments and high investment thresholds.

Unisuper and Victorian Funds Management Corp have also reined in private equity exposure, while the shortfall is largely being met by Asian and Canadian funds, such as Singapore’s GIC and the Canada Pension Plan Investment Board.

Partners Group last week said it planned to expand in Australia and continue to invest in infrastructure, as well as health care, special industrial and food processing. The group has also been working with local super funds to invest in private equity globally, with a specialty in mid-cap markets.