Long track record in core retail puts Henderson Global Investors in pole position to advise biggest Australian fund on European investment debut
AustralianSuper, Australia’s biggest superannuation fund, plans to invest for the first time in the UK and Europe.
The A$43bn fund is talking to Henderson Global Investors about appointing the group as investment manager, initially in the UK, and is said to have been impressed by Henderson’s experience in core retail investment management.
Myles White, Henderson’s director of shopping centres and manager of the UK Shopping Centre Fund, has a 20-year European retail track record.
He also advises the Australian Future Fund on its one-third stake in Birmingham’s Bull Ring. In December 2010 his Henderson team advised APG and Canada Pension Plan on their £870m purchase of 50% of the Westfield Centre in Stratford.
Andrew Friend, Henderson’s head of UK property distribution since last October, said then: “We have large investor clients from Canada and Australia and would like to expand there.”
A Henderson spokeswoman could not comment on new potential mandates, but said: “We are concentrating on Australia and have developed relationships there that we are pursuing. We have focused on pooled funds in the past but are apply-ing resources to working as investment adviser to big sovereign wealth funds and insurance groups.”
Australia has the world’s fourth-largest private pensions system with $1.3trn of assets. A Russell Investments/ANREV survey last September found that institutional real estate investments are overwhelmingly domestic but they expect allocations to offshore real estate to rise by 34% in two years, from a low base of 2.3%, to 3.2%.
The funds identified diversification, domestic capacity constraints, access to high growth and distressed markets as the driving factors.
Paul Vosper, head of RREEF’s client relations in Europe, said: “In the next 24 months we’ll see much more Australian capital flowing into the market. They’re getting ready, forming alliances with managers and doing the market research.”
A number of other large global investors have made property commitments in the past few weeks. Swiss fund manager Quantum Global teamed up with LaSalle Investment Management to launch a syndicate to invest in $100m-plus core assets in Australian, French, German, UK and US cities. The venture has a $1bn gross capital target.
Canada Pension Plan Investment Board, already a big investor in the UK, has formed a joint venture with Land Securities on the REIT’s £1bn Victoria Circle scheme in London. Meanwhile, Pension fund Kumpulan Wang Persaraan of Malaysia is targeting Europe for the first time and Korean pension fund NPS is to commit $300m to Blackstone’s global Real Estate Partners VII fund, which has already raised $6bn.
White: Henderson Global Investors’ shopping centre investment expert already advises the Australian Future Fund on its 33% Bull Ring centre stake.