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AusSuper tips another $13b into private equity investments

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But while listed investments are hammered by inflation woes and the threat of rising interest rates, Australia’s prudential regulator has also warned some superannuation funds to ensure valuations of unlisted assets reflect market conditions.

AustralianSuper, which was not necessarily targeted by APRA’s comments, said the new private equity strategy will allow it to invest in General Partner funds, co-invest alongside these general partner funds, and co-underwrite opportunities.

This partnership model has seen AustralianSuper pull off some big deals locally. Last June, the fund worked with private equity group BGH Capital to buy Navitas, an education firm, for $2.3 billion.

The superannuation fund began co-underwriting in 2018 and has deployed $3 billion alongside general partners in co-underwriting transactions and co-investments over the last 18 months and across 10 transactions globally.

The super fund’s plans to target the US come as private equity deals continue to drive global growth in private markets.

According to McKinsey & Co’s latest global private market review, assets under management ballooned to an all-time high of $US6.3 trillion, driven by asset appreciation.

The consulting firm found that private equity, by nearly any measure, outperforms public market equivalents with net global returns of over 14 per cent.