Michael Pedler, Investment Analyst, Funds Management
There was a record turnout at our annual Investment Forum last week. With over 600 attendees this was the biggest forum we’ve held to date and gives us an indication of just how interested you are in learning more about the kind of investments QSuper makes on your behalf. Here’s a snippet of the event and an overview of this year’s forum. A video of the event in full is available through the links below.
The Investment Forum is held each year and is hosted by our Chief Investment Officer Brad Holzberger. In the past we’ve heard from specialists in real estate, infrastructure, asset allocation and economics. This year we focused on private equity.
Why private equity? We’ve set out the case for you that we believe investment returns will be lower in future years than we’ve seen in the recent past. This isn’t limited to QSuper, it’s a global pattern that all investors face.
Now we don’t just passively accept that headwind. We are doing many things to try to create returns which exceed those available from straightforward exposures to listed share markets and bond markets. One of our private equity managers Partners Group represents one of those initiatives.
Partners Group was appointed in 2012 and currently manages $1.5 billion of private equity assets with plans to invest a total of $5 billion over coming years. If you’re invested in the Balanced, Aggressive, Moderate or Lifetime options you’ll have exposure to this program. Currently QSuper’s private equity program accounts for about 5 per cent of the Balanced option, with approximately 3 per cent of the total allocation to private equity managed by Partners Group.
Since we began working with Partners Group they have met the brief of exceeding returns from more traditional share markets. At this year’s forum we were fortunate to have Dr Marcel Erni, one of the founders of the firm, to explain how that’s being done.
Based in Zug, Switzerland, Partners Group is one of the world’s largest private equity managers, managing around $65 billion of global assets. With strong resources, Partners Group has over 780 employees representing over 50 nationalities across 18 offices around the globe.
During the presentation Dr Erni provided some information on the performance of QSuper's investments which have been very good to date at 24.3 per cent per annum1 since inception (exceeding the local benchmark of MSCI World + 3%, which equates to 10.7 per cent per annum).
We also heard about some of the types of investments Partners Group has made on our behalf including Global Blue (a provider of VAT/GST refund services to international travellers), Dynacast (a global manufacturer of customised, highly-engineered metal components), and Kindercare (the largest US provider of for-profit early childhood education), which we’ve blogged about previously.
There were some great questions put to Dr Erni by our members, ranging from ESG considerations within the private equity portfolio, due diligence of assets, banking arrangements, views on resource companies, to why the portfolio has held few Australian private equity assets.
You can learn more about the ways Partners Group creates value for the companies it invests in by viewing the full event through the links below. The video is broken down into the following sections:
If you’d like to know more or register for any of the seminars we’re currently running please check out our website.
1. This is the local currency return net of the QSuper AUD hedge and at the time of writing is unaudited (i.e. based on underlying unaudited asset values).
The views of the author and those who provide the responses to comments posted on this blog are not necessarily the views of the QSuper Board. We’ve put this information together as general information only and you should get professional advice before relying on this information.
Past performance is not a reliable indicator of future performance. Each of our investment options has a different objective, risk profile, and asset allocation.
Investment Analyst, Funds Management
Michael’s role involves supporting the senior portfolio managers and the Head of Funds Management in implementing investment policy decisions, structuring potential investments and managing the external investment managers.