URGENT UPDATE: Australian superannuation funds are set to DOUBLE their investments in the United Kingdom and European Union to over $660 billion in the next decade, reflecting a strategic shift as local opportunities dwindle. This surge comes just ahead of a critical summit in London next week, where fund executives will convene to explore investment opportunities in global infrastructure.
New projections reveal that these funds will increase their overseas investment by 10-11 percent annually, driven by a growing pool of retirement savings that is now the fourth-largest globally. “Australia’s retirement capital is attracting attention from the world’s leading economies, enhancing returns for Australians while supporting vital infrastructure projects abroad,” stated Misha Schubert, CEO of the Super Members Council.
Currently managing approximately $4.3 trillion in funds, Australian super funds are expected to see their total assets swell to $8.3 trillion by 2035, fueled by an influx of $4 billion weekly. Investments in the UK and EU currently amount to $83 billion and $181 billion, respectively, with projections indicating increases to $203 billion and $460 billion within the next decade.
The report by Mandala Partners emphasizes that while Australian funds have historically focused on national infrastructure, the need for diversification is pushing them towards international projects. Over the last decade, overseas investments have risen from 41 percent to 47 percent of total portfolios, with 60 cents of every new dollar now allocated abroad.
The upcoming summit in London and Birmingham will feature discussions with key officials from the UK government, alongside representatives from major Australian and British financial institutions. This event underscores the growing influence of Australian capital in global markets.
David Whiteley, head of global external relations at IFM Investors, noted, “Australia’s super system is recognized as a long-term ally by several EU and UK nations. Our engagement next week will highlight not just the scale but also the unique characteristics of our capital.” The firm is involved in significant European projects, including stakes in Stansted and Manchester Airports, as well as Gdansk port.
As Australian super funds continue to eye international opportunities, the potential for revitalizing cash-strapped infrastructure in the UK and Europe is immense. The report suggests that government actions such as regulatory streamlining and fostering public-private partnerships could further amplify investment growth.
With the financial landscape rapidly evolving, this summit represents a pivotal moment for Australian funds to solidify their position as key players in the global market. Expect crucial developments and announcements in the coming days as discussions unfold. Stay tuned for updates from this high-stakes gathering set to reshape investment strategies across borders.
