Australia's largest pension fund, AustralianSuper, is aggressively targeting Asia as part of a strategy to double its private equity exposure. The fund, managing A$410 billion (US$287 billion), currently allocates about 4% of its portfolio to private equity. CEO Paul Schroder anticipates raising this to 10% by expanding into private markets, particularly in the Asian region.

This strategic shift follows recent commitments to private equity managers in the US and Europe. With A$85 billion in unlisted assets as of June 30, AustralianSuper is prioritizing co-investments and co-underwriting opportunities in more developed Asian economies. The move is driven by a desire to diversify its portfolio and capitalize on changing market dynamics, according to Schroder.

The fund's recent performance, with a 9.5% return in the year to June 2023, slightly trailed the industry average of 10.5%. This underperformance likely spurred the decision to seek higher returns via private equity. The focus on Asia reflects a broader trend of institutional investors seeking growth in the region.

This expansion into Asia for private equity is a move that could reshape the investment landscape. Other large pension funds are also looking at similar strategies. As AustralianSuper builds its presence in Asia, investors will be watching to see what specific deals the fund pursues and how they impact returns.