Aware Super is looking to double its staff in the next five years as the firm targets almost tripling its assets to $300 billion.
In a webinar with Bloomberg, Damian Graham, chief investment officer (CIO), said the super fund was looking to grow both organically and through mergers.
Formerly known as First State Super, the fund already merged with Vic Super and WA Super last year which made it Australia’s second-largest fund at over $125 billion in assets under management (AUM).
“We have the capacity to have $200 billion to $300 billion in assets. This growth could come from both organic growth and mergers,” Graham said.
“We will continue to grow and are assessing the type of growth and capabilities that are needed to make good investment decisions.
“The team could be significantly larger than it is today, I would estimate it would double, in the next five years and this growth will be in Australia as well as in other markets.”
Possible new office locations would be most likely to be in Europe and the United States.
He said the firm was increasingly looking offshore and its assets were now 60% offshore compared to 40% five years ago.
“Five years ago, we had 60% of our assets in Australia and 40% offshore whereas now we have 60% offshore and that will continue to trend that way as the Australian market is constrained in some areas. It might get as high as 70% and 30%,” Graham said.
It would also look to increase its exposure to infrastructure and property, areas where it was currently underweight.
“We are underweight infrastructure and property, not massively but by about 1%-2% which is a lot in terms of billions of assets, so we are keen to put a few billion into each of those two assets so this could become an overweight if we see good opportunities,” Graham said.
“We are holding cash but that is not for defensive reasons, it’s about having capacity to buy assets when they come to market.”
Meanwhile, the firm said it was holding off adding exposure to China, with Graham saying it had not behaved as he had expected when they first entered the market. The firm first invested in the China A-Shares market four years ago and Graham said Aware had found the market was inefficient, particularly for minority shareholders.
“There are some dynamics about being a minority owner which are challenging,” Graham said.
“Three or four years ago, I thought that they were becoming more Westernised in their capital markets but I don’t think that is the journey they are on, they have their way of doing things and are happy with that.
“The market is complex, it is a great story and the market is maturing, there are still some interesting dynamics and that is why we haven’t taken our money out yet.”
The firm was also holding off from investing in India as it felt it was harder to make money in that market, although it held exposure via an emerging market mandate.