AustralianSuper and Churchill team up for US mid-
market opportunities
Australia’s largest pension fund is aiming to triple its exposure to private credit.
Christopher F
16 December 2022
AustralianSuper, Australia’s largest pension fund, has invested $250 million with
Churchill Asset Management for investment in traditional senior and unitranche loans to
private equity-backed mid-market companies in the US, in what the two firms describe as
the beginning of a partnership. The $250 million is an initial installment, expected to
grow substantially.
AustralianSuper has over $4.5 billion committed to private credit globally, just under 2.6
percent of its $175 billion portfolio, It aims to triple its exposure to the asset class going
forward. The growth will entail both direct lending by its in-house team and strategic
partnerships with managers such as Churchill.
Ken Kencel, president and chief executive of Churchill, said in a statement, “We believe
the opportunity in US middle market senior lending continues to be very attractive,
particularly given the floating rate nature of the investments, strong current income
potential, significant lender protections and senior position in the capital structure.”
He added that Churchill looks forward “to helping AustralianSuper achieve its investment
objectives by providing differentiated access to our directly originated, proprietary senior
Joan assets”.
In late August 2021, AustralianSuper opened its New York office, which was originally
planned for a year earlier but stymied by covid-19-related travel restrictions.
Three months later, Private Debt Investor reported that Austral
already retreated from adventurous markets, “seeking more vanilla lending,” and that
this had opened new spaces up for “smaller domestic players, often funded by Australian
superannuation,” levered at the fund level.
ia’s big banks had largelyEarly in 2022, AustralianSuper appointed Eloy Lindeijer to its direct investment decision
making and advisory committee for UK and European investments as part of a push to
scale up its activity in private credit.
More recently, Alistair Barker, the head of total portfolio management at AustralianSuper,
told trade publication JPE Real Assets, “Investments in private-market assets provide
ballast to the return of a diversified portfolio. The use of unlisted assets to diversify
returns through market cycles can provide some stability to the portfolio during listed
share-market volatility, potentially resulting in greater return stability for members.”
Churchill is the private capital specialist of Nuveen, which is TIAA’s asset manager. The
firm invests in mid-market senior loans across economic cycles, lending more than $14
billion annually.