This year the Global Investor 100 welcomes 16 institutions for the first time to our ranking of the world’s biggest institutional investors by private equity exposure. The entrants making their debuts span banks, public and private pension funds, endowments and insurers, and, with the exception of three, all are North American.
The highest ranked new entrant is Japan Post Bank (17), the guardian of ¥220 trillion ($2 trillion; €1.65 trillion) of savings on behalf of millions of customers. With around $18.67 billion of exposure, Japan Post Bank has a larger PE portfolio than some of its more visible peers, such as Australian sovereign wealth fund Future Fund (19) and Aberdeen Standard Investments (22). Yet, by percentage, the Tokyo-headquartered bank has just 0.88 percent of its total assets under management exposed to private equity – the smallest percentage of any institution in the GI 100.
Japan Post Bank has loftier aims. In May, it published a medium-term management plan in which it said it hopes to reach the equivalent of around $91 billion of alternative assets under management by 2026. It is a work in progress. As of May, it had reached just under half of the ¥8.5 trillion three-year alts target it had set in 2018, of which ¥2.2 trillion is invested in PE.
The remaining two non-North America-headquartered institutions are Australia’s Aware Super (74), which formed last year through the merger of three Australian superannuation funds, and the UK’s BP Global (93) – which has committed to funds from BC Partners, EQT and TA Associates.
‘Interesting’ opportunities
In a Q&A with Private Equity International last year, Damian Graham, now Aware’s chief investment officer, said there might be an “attractive vintage” coming up amid a period of depressed pricing. More than a year later, he says asset prices have remained strong.
“The last 12 months has obviously seen a very material underpinning of global growth by governments and central banks and as a result there has been a lack of distress in asset markets,” Graham says. “This has seen the pricing of assets remain stronger than we and most others expected. Interestingly though, whilst prices have been strong, there has continued to be some interesting investment opportunities.”
GPs seeking capital from Aware Super should know the investor takes ESG seriously and is a founding member of the Climate League 2030 initiative to reduce emissions in Australia. The super most recently made a cornerstone commitment to the 2019-vintage Fund II from Australian mid-market PE fund Adamantem Capital Partners, which has said it is committed to net-zero emissions targets for all its portfolio companies. “We will be a member of the fund’s Emissions Reduction Committee, where best practices will be shared amongst members,” Jenny Newmarch, senior portfolio manager for Aware Super, told PEI in December.
By highest exposure to PE among this year’s new entrants, the University of Notre Dame (72) came out on top with 37.4 percent. The Indiana-based endowment even ranked high among the top investors by exposure among the entire list, coming in at fourth.