HOSTPLUS commits A$100m to Partners

The superannuation fund has made its first foray into secondaries with a commitment to Partners Group Secondary Fund 2008, which is targeting €2.5bn.

HOSTPLUS, a superannuation fund for employees in Australia’s tourism and recreation industries, has committed A$100 million ($84 million; €59 million) to a secondaries fund managed by Partners Group.

The Zug-headquartered alternative investments manager is targeting commitments of about €2.5 billion ($3.6 billion) for the fund, a source told PEO. A Partners Group spokeswoman said the fund has not closed yet, but was not in a position to comment further.

What is foreseen is that we will see good, non-distressed assets being sold at distressed prices because the vendors are distressed.

Sam Sicilia

The commitment to Partners Group Secondary Fund 2008 is HOSTPLUS’ first investment in private equity secondaries. The superfund, which manages assets of about A$7 billion, has thus far only invested in funds of funds making primary commitments to private equity funds, Sam Sicilia, chief investment officer of the HOSTPLUS, said in an interview.

“The idea is that there will be a huge amount of secondary opportunities in private equity, and typically, what is foreseen is that we will see good, non-distressed assets being sold at distressed prices because the vendors are distressed,” Sicilia added.

He said he would not like to speculate whether the superfund will make further secondary commitments, “because the opportunity set can evapourate” in time to come.

The superfund made its first commitment to a private equity fund of funds manager in 2000. It currently allocates about 7 percent of assets to private equity, and this excludes investments made in private equity infrastructure funds. So far, it has committed to private equity funds of funds managed by Industry Funds Management, Wilshire Australia and LGT Capital Partners.

HOSTPLUS also allocates about 8 percent of its assets to infrastructure and another 14 percent to unlisted property, though it has not made any commitments to private equity real estate funds, Sicilia said.

Melbourne-based JANA Investment Advisors is HOSTPLUS’ investment consultant.

Just last month, Korea Investment Corporation (KIC) awarded a private equity secondaries mandate to Partners Group to take advantage of high discounts seen in the secondaries market.