Australian pension fund Aware Super cites | Australian Markets

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One of Australia’s largest pension funds is forward of schedule with its plans to invest billions within the UK and Europe, citing enticing investment alternatives, whereas the US outlook has change into more unsure.

Deanne Stewart, chief government of Aware Super, which manages A$190bn ($124bn) for more than 1.1mn savers, stated she noticed a “really significant opportunity for Europe and the UK”, and whereas there have been trade challenges with the US “if you have a look at what’s going on with capital flows . . . you can see where the marginal dollar has been flowing”.

Aware Super opened its first abroad workplace in London in November 2023 and introduced it might invest A$10bn (£5.25bn) within the UK and Europe over a five-year period.

Eighteen months later, it has already met its interim two-year goal of having A$3.5bn invested, because of partnerships with UK power provider Octopus Energy, fibre platform euNetworks and a huge wager on central London workplaces.

Damian Graham, Aware Super’s chief investment officer, stated the investment pipeline within the UK and Europe was sturdy, significantly in companies linked to the power transition. The area gives “a more stable environment for longer term decisions” on this space than the US, he added, as decarbonisation has change into extremely politicised there.

Aware Super’s wager on European belongings comes as some huge traders have began to shift away from US markets in response to Donald Trump’s erratic trade insurance policies and worries in regards to the nation’s growing debt pile. The US greenback fell to a three-year low towards a basket of currencies this week.

Trump’s landmark “big, beautiful” funds invoice has created additional uncertainty, with proposals for new taxes concentrating on international traders within the US. Graham stated he was “very very focused on” understanding the potential impression on the fund, which might quantity to tens of thousands and thousands of {dollars}.

He stated that whereas the US would stay a “large and important market” for Aware Super and different main pension funds, “there’s a question mark over how much goes there into the medium and long term . . . I do think there will be a rebalancing”.

Aware Super’s optimism about European belongings comes as personal capital group Blackstone prepares to considerably increase its investments throughout the area, betting that financial reforms will help revive growth.

The group with $1.2tn in belongings stated this week it might intention to invest “at least $500bn” in Europe within the coming decade, highlighting Germany’s choice to chill out its borrowing guidelines to finance infrastructure and defence investment as a optimistic change. 

Other pension funds have turned to Europe in latest months. 

“We are starting to see a lot of interesting things in European private equity — the opportunities there are growing,” stated Aaron Bennett, chief investment officer of Canada’s University Pension Plan, including that governments have been beginning to do “some difficult but necessary things to improve their long-term economic competitiveness”.

Stewart concluded that when Aware Super seems on the UK and Europe and thinks about “the big global themes that we want to invest in . . . we feel really comfortable with how we are investing here”.