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Super funds' appetite for private assets continues to grow, with the fastest growing sector in percentage terms being private debt.
In the two years to June 2024 private assets in super grew by 34% compared with overall asset growth of 20%, according to Rainmaker Information’s Institutional Roundup Report.
At the end of June 2024 private assets in super were worth $400 billion, compared with June 2022 when private assets were worth $300.
Private real assets: comprised of unlisted investments into property and infrastructure.
This asset class forms the largest component of private market assets in super, amounting to $266 billion or 67% of total private market assets as of end of June 2024.
Private real assets recorded an annual growth of 8%, but the two-year growth rate jumps to 39%.
Super funds overall allocated 10.9% of total investments to private real assets as of June 2024, however some of the larger funds had a much higher allocation.
Private equity
According to APRA data, super funds had a total investment of $106 billion in private equity as of June 2024.
Private equity is the second biggest private market asset held by super funds and amounts to 27% of total private market assets in super.
The total funds in private equity have gone up 16% since June 2022, but only 5% since June 2023.
Super funds on average allocated 4.4% of total investments to private equity as of June 2024 and this has not changed much over the last two years.
The funds with largest private equity assets allocations were Australian Retirement Trust, AustralianSuper, Hostplus and Aware Super.
Their combined total was 55% of total private equity assets in super.
Private debt
Private debt is the smallest yet the fastest growing component of private market assets in super.
Private debt amounts to just 7% of the total private market assets but has grown 75% in two years to June 2024, from $15 billion to $27 billion.
Despite its rapid growth, super funds only allocated 1.1% of total investments to private debt.
As of June 2024, the highest allocations were by Hostplus at 2.8% and MLC Super Fund with 2.7% of total fund investments.
AustralianSuper has reduced its allocation from 2.2% in June 2022 to 1.5% in June 2024.
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Total risk market inflows were down a marginal 0.6% over the year to June 2024, decreasing from $18.3 billion to $18.2 billion.
Dual access ETPs, which are transacted both on stock exchanges and off-market through funds managers, can cost four times as much as the rest of the Australian ETP market.
