(Bloomberg) -- Colonial First State, one of Australia’s biggest pension and wealth managers, plans to boost its private infrastructure holdings as a shelter from volatile markets and sticky inflation.
Chief Investment Officer Jonathan Armitage, who manages A$151 billion ($100 billion), is seeking deals ranging from “tens of millions of dollars” to hundreds of millions, through co-investments and funds, over the next six months.
“We’ve been looking at some data-related infrastructure investments offshore,” Armitage said in an interview. He said CFS was also keen on communications infrastructure and “carbon intensive abatement strategies” such as the production of green steel and concrete.
CFS plans to reallocate money from listed real estate, listed infrastructure and government bonds to fund the new investments, Armitage said. “We think that there’s a return path there in a more volatile inflation period, those type of assets will serve our members and clients well,” he said.
Australia’s A$3.9 trillion pension industry has about a fifth of assets in private markets, with such investments offering less volatility than listed counterparts. Last month, however, the Australian Prudential Regulation Authority warned that some of the funds weren’t valuing assets like private equity and property frequently enough.
CFS has a lower exposure to unlisted assets, at less than 10% of its overall portfolio, Armitage said. The fund was looking to increase that, along with a larger allocation to private credit, and potentially private equity.
“We are being very judicious in the way that we deploy that capital,” he said.
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