Australian pensions giant hikes private credit exposure
AustralianSuper, Australia’s largest superannuation fund, is increasing its exposure to private credit by boosting the size of its partnership with Churchill Asset Management to $1.5bn (£1.18bn).
The investment programme targets senior and unitranche loans to private equity-backed US middle market companies and builds on the partnership established in December 2022.
AustralianSuper has more than $4.5bn invested in private credit globally and has outlined its ambition to triple its exposure in the coming years. It plans to achieve this through a mix of direct lending by its in-house private credit team and strategic partnerships with specialist managers such as Churchill.
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“We believe the current environment is especially appealing to increase our investments in private credit,” said AustralianSuper’s head of private credit Nick Ward.
“Lending margins have increased due to heightened macroeconomic risks, base rates have gone from zero to five per cent so you are now looking at yields of 10 to 12 per cent for senior lending to middle market companies.”
AustralianSuper manages more than A$300bn (£158bn) of retirement savings on behalf of its 3.3 million members.
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Churchill is the $47bn US private capital investment-specialist of Nuveen, the asset manager of the Teachers Insurance and Annuity Association of America.
“We are excited to grow our partnership with AustralianSuper, Australia’s largest superannuation fund, and increasingly an investment leader on the global stage,” said Ken Kencel, president and chief executive of Churchill.
“AustralianSuper’s latest installment reinforces the strength of our strategic partnership and their confidence in both our strategy and the private credit market. We believe we are currently in one of the most attractive investment environments in recent history, and we are pleased to provide AustralianSuper differentiated access to our directly originated, proprietary senior loan assets.”
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