Eye on infrastructure as fund goes global

Investments in unlisted infrastructure will be key a focus for Aware Super as the fund opens its first office outside Australia later this year.

Aware Super’s Head of Infrastructure, Mark Hector, said the fund was likely to invest another circa several billion dollars in the asset class in coming years, and a significant portion would be targeted to be deployed offshore. 

The fund will later this year open its first overseas office, in London, as part of its strategy to diversify geographically and provide exposure to different assets on a direct basis. Unlisted infrastructure has played an important role in helping the fund deliver strong long-term returns for its 1.1 million members, Mr Hector said. 

“It also has strong appeal in this environment because it has a great combination of growth and defensive qualities, and revenue streams generally correlated with inflation,” he said.

Aware Super has more than $150 billion under management, with a target of $250 billion by 2026.

Its infrastructure portfolio weighs in at circa $15 billion now. About $10 billion of that is invested in Australia, and assets in Europe and North America account for most of the balance.

The fund’s infrastructure portfolio was accordingly likely to grow by around $10 billion over the next circa 5 years, he said.

While Aware Super expected to invest relatively more offshore in future, Australia would naturally remain it's a core market, he said.

“We’ve been investing here since we were established more than 30 years ago,” he said.

“Considering: tax advantages we have in the domestic market; being a trusted local custodian of sensitive assets; existing ownership of some platform assets with further growth potential; and the the reputation we’ve built as a strong, reliable and long-term investor, this opens doors to some compelling investment opportunities at home.”

Digital and energy transition infrastructure were among assets of particular interest to the fund, he said.

In Australia, the fund partnered with Macquarie Infrastructure and Real Assets to acquire telecommunications provider Vocus Group in 2021 and subsequently merging the Vocus New Zealand business with 2 Degrees.

Its energy transition assets are diversified predominantly across platforms including Intera renewables (AUS), Tilt renewables (AUS), Terragen renewables (USA) and Generate Capital emerging/ancillary smaller scale investments (USA).

Aware Super’s Head of Infrastructure, Mark Hector, says the asset class has a great combination of growth and defensive qualities.

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