Australia’s biggest pension fund, AustralianSuper, has announced plans to invest a further £8bn in the UK, bringing its total investment in the UK to over £18bn by the end of the decade, in a move that is expected to “unleash billions in productive finance”.

AustralianSuper has had a presence in the UK since 2016, with approximately £8bn currently invested in the UK and holding over £2.5bn in UK listed equities.

The latest investment means that the fund is on track to deploy more than £8bn of new capital by 2030 into large-scale, long-term investment opportunities in some of the fastest growing sectors, such as the energy transition and digital infrastructure.

The investment is also in line with the group's intention for £7 of every new £10 invested to be deployed outside Australia, as it pursues the best global investment opportunities and long-term returns for members.

The investment was confirmed after Chancellor, Jeremy Hunt, met with AustralianSuper CEO Paul Schroder, and was announced hot on the heels of the Chancellor’s latest set of pension fund reforms designed to increase investment in UK growth, which included plans to require defined contribution (DC) schemes to publicly disclose their level of investment in UK businesses by 2027.

It also comes amid growing pressure for UK pension funds to invest more in the UK economy, with the Chancellor's Mansion House reforms in particular expected to "unlock" an additional £75bn in funding for the UK economy.

This was also a key theme in the Chancellor’s 2023 Autumn Statement, with a number of measures looking to enable UK pension funds to invest into the UK's innovative companies.

Announcing the investment, HM Treasury pointed out that the Australian pension fund industry is the fastest growing in the developed world with assets under management doubling every five years, noting that the Chancellor has previously referred to the success of the pensions model in Australia.

And industry experts have previously suggested that the UK pension landscape could learn lessons from the Australian pension model, both in terms of investment incentives, and the potential for a pot for life or lifetime provider model.

Commenting on the investment, Prime Minister, Rishi Sunak, stated: “The raft of investment announcements we have seen today show 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.

Adding to this, Hunt stated: “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.”

---