Super funds boost private capital industry

Australian private capital investment industry has been boosted by significant institutional support from within the nation’s $2.8 trillion superannuation sector, according to the Australian Investment Council, formerly known as AVCAL.

The contribution of the superannuation industry, which is one of the biggest investors into Australia’ unlisted business sector through private capital firms, was expected to accelerate over the next few years.

The industry grew over 27 years to more than $26 billion of assets managed on behalf of institutional investors, including superannuation and pension funds all over the world.

Over the past five years, the sector raised globally more than $19 billion, of which $17 billion went into Australian businesses.

Additionally, according to AVCAL, the analysis of allocations of Australian private capital against the United States showed there was still a considerable room for growth in the domestic market.

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“As an industry, we need to remain focused on the important economic contribution played by the private capital,” said Andrew Major, Australian Investment Council board chair and general manager unlisted assets at HESTA superannuation fund.

“There is certainly room to increase institutional investors allocations towards private capital given the proven performance of the asset class.

“The private capital industry is poised for further growth and we believe our nation’s super system will continue to play a critical role in that journey.”