Focus on Global Growth New jobs, better infrastructure
Focus on Global Growth New jobs, better infrastructure
ALABC Infrastructure Forum Stephen Anthony, Chief Economist, Industry Super Australia 23 May 2017 1
GDP, Super assets and stock market Capitalisation (1983 – 2016)
Source: ABS and Datastream
2
Projected superannuation assets (All amounts are in future nominal dollars)
Deloitte Super model projections from 1 July 2015
APRA market statistics to 30 June 2015
Source: Datastream Source: APRAABS andand Deloitte Actuaries & Consultants, 2015
3
Superannuation and Future Fund assets $bn, June 2015
4
Who are Industry SuperFunds? • Our funds include AustralianSuper, HESTA, Cbus, Hostplus & MTAA Super • We invest $500+ billion in super savings on behalf of 5 million Australians
• We invest heavily in infrastructure & property - $75 billion invested in Australia & globally • We are not-for-profit: all profits to members
5
Our long-term vision
An extra $100 billion would be available for infrastructure if other Australian super funds allocated the same amo Source: APRA Quarterly Superannuation Statistics June 2015. Note: Market share of Industry funds 21%, retail 27%
6
Super fund % returns
Source: SuperRatings
7
How we think about investing • Pioneers of the infrastructure asset class globally
• Significant allocation to unlisted infrastructure and property • Domestic and global asset holdings • Beginning a journey in Latin America (Pacific Hydro, Conmex etc.) • Mostly brownfield assets
8
IFM Global Infrastructure Fund North America
Source: IFM Investors
9
IFM Global Infrastructure Fund UK/Europe
Source: IFM Investors
10
Emerging markets.. • • • • • • •
11
First targets (Brazil, Mexico, Columbia, Argentina, Chile, Peru) out of Latin nations Two groups − Chile & Mexico (early developers) − Others (later arrivals) Often about basic needs – building roads - not acquisitions Rule of law – best: Chile – worst: Brazil / Argentina Contracts not tested in crisis / regulatory frameworks new Governments have few resources to finance investments Probably too small institutional experience reach conclusions − $US40 billion Chile, 20 useful transactions in Mexico / 100 mil population
Case for entry • • • • •
12
GDP per capita growing fast – relative to advanced OECD So high returns for acceptable risk – at least in theory Commodities – metals via Peru & Chile and crude oil in Mexico & Columbia Target projects exposed to volume such as roads rather than availability such as jails or ports Returns relatively low in Chile due to it popularity; financing in $US is cheap in Mexico. The first markets worth exploring are Columbia, Brazil and Peru
A stronger economy & a higher living standard for all
13
IFM Infrastructure Fund Australia
14
Industry super funds - the next 5 years $10 billion dollars to be invested over the next 5 years 16,000 construction jobs Melbourne Airport
NSW Ausgrid
15
Brisbane Airport
Adelaide Airport
Alice Springs Airport
Port of Brisbane
Southern Cross Station
ALABC Infrastructure Forum Stephen Anthony, Chief Economist, Industry Super Australia 23 May 2017 1
GDP, Super assets and stock market Capitalisation (1983 – 2016)
Source: ABS and Datastream
2
Projected superannuation assets (All amounts are in future nominal dollars)
Deloitte Super model projections from 1 July 2015
APRA market statistics to 30 June 2015
Source: Datastream Source: APRAABS andand Deloitte Actuaries & Consultants, 2015
3
Superannuation and Future Fund assets $bn, June 2015
4
Who are Industry SuperFunds? • Our funds include AustralianSuper, HESTA, Cbus, Hostplus & MTAA Super • We invest $500+ billion in super savings on behalf of 5 million Australians
• We invest heavily in infrastructure & property - $75 billion invested in Australia & globally • We are not-for-profit: all profits to members
5
Our long-term vision
An extra $100 billion would be available for infrastructure if other Australian super funds allocated the same amo Source: APRA Quarterly Superannuation Statistics June 2015. Note: Market share of Industry funds 21%, retail 27%
6
Super fund % returns
Source: SuperRatings
7
How we think about investing • Pioneers of the infrastructure asset class globally
• Significant allocation to unlisted infrastructure and property • Domestic and global asset holdings • Beginning a journey in Latin America (Pacific Hydro, Conmex etc.) • Mostly brownfield assets
8
IFM Global Infrastructure Fund North America
Source: IFM Investors
9
IFM Global Infrastructure Fund UK/Europe
Source: IFM Investors
10
Emerging markets.. • • • • • • •
11
First targets (Brazil, Mexico, Columbia, Argentina, Chile, Peru) out of Latin nations Two groups − Chile & Mexico (early developers) − Others (later arrivals) Often about basic needs – building roads - not acquisitions Rule of law – best: Chile – worst: Brazil / Argentina Contracts not tested in crisis / regulatory frameworks new Governments have few resources to finance investments Probably too small institutional experience reach conclusions − $US40 billion Chile, 20 useful transactions in Mexico / 100 mil population
Case for entry • • • • •
12
GDP per capita growing fast – relative to advanced OECD So high returns for acceptable risk – at least in theory Commodities – metals via Peru & Chile and crude oil in Mexico & Columbia Target projects exposed to volume such as roads rather than availability such as jails or ports Returns relatively low in Chile due to it popularity; financing in $US is cheap in Mexico. The first markets worth exploring are Columbia, Brazil and Peru
A stronger economy & a higher living standard for all
13
IFM Infrastructure Fund Australia
14
Industry super funds - the next 5 years $10 billion dollars to be invested over the next 5 years 16,000 construction jobs Melbourne Airport
NSW Ausgrid
15
Brisbane Airport
Adelaide Airport
Alice Springs Airport
Port of Brisbane
Southern Cross Station
