SYDNEY: Mercer Superannuation Australia Ltd will add private equity to its default pension options for the first time, joining a growing number of retirement funds in embracing the strategy to diversify their holdings.
The A$75bil (US$49bil) pension will begin deploying capital this year and aims to bring the allocation to around 5% of default options which members are automatically placed in, said its chief investment officer Graeme Miller.
Most of the new money will be allocated to secondary and co-investments, he added.
“If you look at the structure of capital markets, the trend has been to stay private longer,” Miller, who joined Mercer from TelstraSuper this year, said in an interview.
“More and more companies are turning their backs on public markets.”
The move is the latest in a run of private equity allocation increases among so-called superannuation funds within Australia’s A$4.1 trillion retirement system.
Colonial First State is also set to deploy retirement capital into private equity for the first time this year. — Bloomberg
