Pension Funds and Superannuation Schemes in Asia (including Australasia) Looking to Invest Globally

by Yong Xiang Pua

  • 19 Aug 2011
  • PE

While domestic markets of Asia, including Australasia, have received increased attention, some investors in this region continue to maintain a global investment horizon when considering private equity investments. Preqin’s data shows that 50 Asian pension funds, including superannuation schemes, are looking to invest in non-Asian markets. Representing a collective allocation of more than $21bn to the asset class, 90% and 86% of the investors are interested in the North American and European markets respectively, while 30% are open to gaining exposure to other markets such as Latin America and Africa.

For example National Pension Service, which is one of the largest pension funds in South Korea, pursues a global private equity mandate as part of its plans to attain an overall allocation of more than 10% to alternative assets by 2014. It considers various private equity fund types, including buyout, venture early stage and distressed vehicles. International fund managers National Pension Service has worked with include Blackstone Group, Kohlberg Kravis Roberts and TPG. Despite the fact that these managers are well established, the KRW 324trn pension fund does not rule out the prospect of investing with new fund managers.

One significant investor in non-Asian markets is Japan’s Dainippon Ink & Chemicals Pension Fund. Established in 1975, it looks towards North America and Brazil when seeking opportunities overseas. Dainippon Ink & Chemicals Pension Fund prefers small to mid-market buyout, distressed debt and mezzanine funds, with no specific sector preferences.  The Japanese private pension fund works with international fund managers that have local offices in investee countries.

Another investor that shares the same sentiments is Australia-based SunSuper. It believes that vehicles targeting distressed markets present good opportunities. The superannuation scheme is also willing to invest in small to mid-market buyout funds; however it limits its geographic exposure to developed markets, including North America and Europe. The superannuation scheme is also open to investing in first-time funds.

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