Aware Super will explore more infrastructure fund investment opportunities in Asia, as the Australian superannuation fund ups its allocation to indirect investments, said Maria Donnelly, Senior Portfolio Manager Infrastructure at Aware Super.

Aware Super, which manages an AUD 21bn (USD 14.8bn) global infrastructure portfolio, currently has no exposure to Asian infrastructure funds and will pursue opportunities there, given growth trends driving a boom in the region’s infrastructure, Donnelly told the Infralogic Investors Forum in Sydney on 3 March.

Australia’s third-largest pension fund, with a legacy of prioritising direct investments, is mulling more fund opportunities to beef up returns and broaden its portfolio diversity, as reported.

Aware Super is not alone. AustralianSuper will also reportedly shift its investment focus to external funds amid concerns on underperformance of internally managed funds and heightened competition for assets.

“Ongoing asset management of direct investments is very resource-intensive. That’s why we have adopted a hybrid approach,” said Donnelly during her panel discussion. It is targeting having around 60% of investments internally managed across all asset classes, she said.

The asset owner will seek to partner with general partners (GPs) which have on-the-ground expertise – something that is relevant to Asia where, given its core-plus characteristics, GPs can add value in delivering business plans, she said.

Aware Super will look to co-underwrite deals and make fund commitments on the back of those, Donnelly said on the panel.

Cheque sizes of about USD 300m are the sweet spot for co-underwriting opportunities, Donnelly told Infralogic on the conference sidelines.

However, tickets will likely be smaller in Asia where diversification between geographies and sectors will be critical, she added.

The pension fund is yet to set its planned allocation for fund investments in Asia versus in the US and Europe, she said.

Asia-Pacific has a healthy pipeline of infrastructure managers currently in fundraising mode, with many forming successor regional vintages. They include Stonepeak, KKR, Macquarie, as well as Singapore’s Keppel and Seraya Partners, according to Infralogic.

Global managers Brookfield, CIP, and I Squared are also fundraising for emerging markets funds with Asian sleeves. In addition, India-specific funds NIIF and Neo Asset Management are in the market, while US investor DigitalBridge is raising capital for a Japan-focused vehicle.

Aware Super, with AUD 210bn in total AUM, has focused its infrastructure investments on energy transition and digital in recent years. In January, it announced a USD 300m investment into Vantage Data Centres APAC, a DigitalBridge-backed platform with nearly 1 GW across Australia, Hong Kong, Japan, Malaysia, and Taiwan.

Aware Super last month announced a revamped investment structure under a “total portfolio approach”, marrying its data, liquidity management, public and private markets, and defensive assets divisions.

It introduced a standalone private markets arm under the new structure to oversee AUD 47bn across infrastructure, property and private equity.