AustralianSuper to Invest Over $10 Billion in UK by 2030

AustralianSuper, Australia’s biggest pension fund, said that it will inject a fresh $10.28 billion investment in the UK, taking its total investment to more than $23.10 billion by 2030.

The decision comes after the UK’s Chancellor Jeremy Hunt met with AustralianSuper CEO Paul Schroder, alongside some of the Board, early this week and rounded off a day of significant investment announcements, including the government announcing over $461.95 million of funding for advanced manufacturing. 

Growing the economy is one of the UK Prime Minister Rishi Sunak’s priorities, and is part of the plan to improve economic security and opportunity for everyone. The UK has secured investment from major corporations over the past year, and according to PricewaterCoopers, around 4,000 CEOs see the UK as a top-three priority country for investment, alongside the US and China.

It also follows the announcement of a series of pension fund reforms to back British business and increase returns and transparency for savers, including a new Value for Money (VFM) framework aimed at improving the performance of defined contribution pensions – a market growing rapidly, fuelled by the success of Automatic Enrolment in increasing pension savings by over £26 billion between 2012 and 2022. 

UK Most Attractive

Commenting on the fresh investments from AustralianSuper, Rishi Sunak said that the raft of investment announcements showed that the UK remains one of the most attractive places to invest in the world.

“But because of the difficult, long term decisions the government has taken, the economy is now turning a corner, and we must stick to the plan – driving investment and growth to deliver long-term change and a brighter future everyone,” he said.

Jeremy Hunt said that this major investment from AustralianSuper will promote growth and strengthen the UK’s position as a leading financial centre, creating wealth and helping to fund public services.

“Britain continues to be Europe’s leading hub for investment, and it is through commitments like this that we will funnel billions into our brightest, burgeoning businesses to scale up and grow,” Hunt added.

The Australian pension fund industry is the fastest growing in the developed world with assets under management doubling every five years, and the Chancellor has previously referred to the success of the pensions model in Australia, which has pioneered a similar set of reforms to VFM.  

AustralianSuper has had a presence in the UK since 2016, with approximately $10.28 billion currently invested in the UK and holding over $3.21 billion in the UK listed equities.

Schroder has praised the UK’s investment opportunities for enabling high-quality, long-term returns for members. In future, the company expects $8.98 of every new $12.83 invested to be deployed outside Australia, as it pursues the best global investment opportunities and long-term returns for members.   

The UK has the largest pension market in Europe, worth over $3.21 trillion. Last year Hunt set out his ‘Mansion House Reforms’ to capitalise upon this, with the possibility to unlock an additional $96.24 billion for high growth businesses – supporting the Prime Minister’s priority of growing the economy and delivering tangible benefits to pensions savers.

These include the ‘Mansion House compact’ which encourages pension funds to invest at least 5% of their assets in unlisted equity, which is in line with the Australian model. 

The UK’s Minister for Investment Lord Johnston said that foreign investment is not just about numbers on a spreadsheet. It creates jobs, nurtures skills and unleashes our nation’s innovative spirit. That’s why the UK’s recent trade deal with Australia prioritised boosting investment flows. 

“AustralianSuper’s ongoing commitment shows the strong relationship we have built as they create a global centre of excellence in London. We are a top choice for major investments like this, and the government is committed to promoting the opportunities available to global investors so they choose the UK,” Johnston added.

The UK-Australia free trade agreement, which came into force on 31 May 2023, includes comprehensive provisions on investment, which has made the UK a more attractive place to do business.