Megafunds from Australia are being forced by a crowded home market to look for high-yield private market investments in Europe and North America as they compete with other pension industry heavyweights abroad. During the next three years, Aware Super, a $150 billion (£83 billion) fund, announced it would launch an investment unit in Europe and spend up to A$16 billion in direct infrastructure and real estate investments in the US and Europe. The fund has surpassed the Australian market, according to Aware’s Robert Credaro, the head of growth assets, who also announced plans to build a specific investing office for Europe since the fund is likely to grow to A$250 billion over the next 3 years.
North Harbour Clean Energy (NHCE) has received a cornerstone investment from Aware Super, positioning the A$155 billion (€104 billion) superannuation fund to take advantage of an upsurge in Australian energy technologies.
The Aware Super investment, which is the company’s first in the field of renewable energy storage, has the long-term goal of creating a A$1 billion energy storage platform. Mark Hector, senior portfolio manager at Aware Super, told IPE Real Assets that the opportunity was at an earlier stage of development and hence carried more risk and higher potential benefits.
“We do have a mission to create and build,” he continued (projects). We have completed a few PPPs as well as other significant capital projects, which obviously come with higher risks.”
“It is part of our investment mindset that we should not merely concentrate on low-risk, low-return investments in order to create optimal returns for members.”
Hector claimed that because of its size, the fund was inclined to invest more money in sizable standalone projects.
Together with a team of specialized energy specialists that founded the company, he claimed that the NHCE platform offered “a brilliant approach for us” to gain access to smaller-to-medium-sized projects. Flow battery storage and pumped hydro storage projects will be built with the oversight and permission of the fund, and Aware Super will cover all development costs.
Hector claimed he couldn’t discuss the fund’s equity investment or the current ownership interest in NHCE. “What I can say is that we are in a major equity stage and are financing start-up expenditures, working capital, and development costs associated with due diligence in order to bring projects to fruition.”
“In terms of our desire for equity checks for the underlying enterprises, they could range from several tens of millions to hundreds of millions. Over the course of several years, our goal is to build a platform worth at least A$1 billion.” According to Tony Schultz, managing director of NHCE, the company’s objective is to concentrate on hastening projects to the point of commercial operation. “It takes more than just switching to renewable energy sources to electrify the Australian economy, according to Schultz.