Perspectives
27 February 2025
Managing close to $US2.6 trillion (~$A4.1 trillion) of assets, Australia's pension funds – known locally as superannuation or ‘super’ funds – represent the fourth largest and fastest-growing retirement savings pool in the world, despite Australia being ranked 56th largest country by population size.
Growing at around 13 per cent a year,1 and up almost 500 per cent over the past two decades,2 the size of the nation’s collective pension savings could nearly triple to $A11 trillion ($US6.9 trillion) over the next 20 years.3
As the capital held by these funds grow, so does the need to deploy it, at scale. Having long outgrown their home market, these funds are increasingly looking across the Pacific to the United States for opportunities to diversify their portfolios and provide the returns needed to deliver for their members,” explains Heather Ridout AO, Australia’s Consul-General in New York.
Macquarie has been a long-term partner to many of Australia’s largest super funds. Through diverse service offerings from Macquarie Asset Management (MAM) and Macquarie Capital, it works alongside Australian super funds to help them identify and realise on-and-offshore investment opportunities that align with their portfolios’ objectives.
In the Australian super industry’s relatively short 30-year existence, a combination of investment growth and member contributions has meant that growth is already outpacing countries with comparable systems, as Karl Kuchel, Head of Infrastructure in the Americas for Macquarie Asset Management, explains.
“At its current growth trajectory, Australia could become the second-largest pension market globally by 2030,4 and the United States has become a natural destination to deploy this capital, given the size of the economy and its strong performance over recent years.”
Source: Deloitte5
In 2024, Australia’s net foreign equities position hit an all-time high of $A586 billion ($US370 billion), indicating that Australian super funds and other investors now hold more equity in overseas companies than foreign investors hold in Australian companies.
With this level of available capital and its potential for offshore deployment, there are many compelling and attractive sectors and investment thematics. For example, as the US looks to AI and digitalisation as critical components of its economic growth trajectory over the next decade, Australian capital could support the development of digital infrastructure like new data centres, fibre networks and cybersecurity systems essential to enable the creation, storage, transmission, and processing of data needed to support it.
Super funds are already capitalising on these opportunities as Chris Trent, Head of Client Solutions Group in ANZ for Macquarie Asset Management, explains, “Our superannuation clients are already actively investing in digital infrastructure supporting AI and high-performance computing in the US, and we’re facilitating this through our private infrastructure funds.”
Macquarie Asset Management works with 18 out of the 20 largest superannuation funds in Australia, supporting them in managing assets on behalf of their members, deploying capital effectively around the world and delivering investment returns. Its deep infrastructure expertise, alongside investment sourcing, diligence and value creation offerings, support Australian super funds to grow the savings they have been entrusted to manage.
“We act as a fiduciary for our clients and have been successfully investing in a variety of infrastructure sectors including energy, transportation, digital infrastructure and waste management in the US for more than 20 years. This puts us in a unique position to leverage our experience and deep expertise to connect Australia’s super funds with compelling investment opportunities here,” adds Kuchel.
“Macquarie Asset Management’s investment in Long Beach Container Terminal is a prime example of the high-quality infrastructure investment opportunities that we identify for our clients and partners - such as super funds - to deliver on their portfolio objectives of stable, long-term returns,” explains Kuchel.
Case study
Source: Long Beach Container Terminal
Through a consortium led by Macquarie Infrastructure Partners IV, a fund managed by MAM, Macquarie acquired 100 percent of Long Beach Container Terminal in 2019.6 The terminal in California is one of the most technologically advanced in the world.7
“Macquarie has had a presence in the US for more than 30 years, employing more than three thousand people across our 18 offices here, and a further 36,100 people in our managed fund assets and investments. Bringing together our Australian heritage, with our experience in the US and deep expertise in infrastructure, positions us particularly well to connect Australia’s super funds with compelling investment opportunities here,” Kuchel explains.
Macquarie Capital advises Australia’s leading super funds on both investing in and divesting assets in their portfolios across sectors such as infrastructure and energy, critical minerals real estate, technology and digitalisation, defence and government services, investments and growth strategies critical to delivering long term investment returns to their members, as Joanne Spillane, its Head of Private Capital Markets, explains.
“Macquarie Capital has a deep understanding of Australian super funds, their values, objectives and strong focus on delivering for their members. This allows us to identify suitable investment options and, where appropriate, co-invest alongside them, which further demonstrates the partnership model between us and them,” says Spillane.
Case study
Macquarie Capital acted as developer and exclusive financial adviser to NYNJ Link in 2013 on the $US1.2 billion replacement of the Goethals Bridge, linking Staten Island, New York and Elizabeth, New Jersey. NYNJ Link is currently owned by Macquarie Infrastructure Partners III (90 per cent) and Kiewit Development Company (10 per cent), the lead construction contractor for the bridge replacement project.
The original Goethals Bridge opened in 1928 and was one of three bridges linking Staten Island and New Jersey. The Goethals Bridge Replacement Project was awarded by the Port Authority of New York and New Jersey in 2013 and represented its first new bridge build in 80 years. The project involved the construction of a new expanded cable-stayed bridge and demolition of the existing structure, with the new bridge completed in 2018.
The new bridge was financed by private activity bonds, federal funding via the Transport Infrastructure Finance and Innovation Act, milestone payments from the Port Authority and equity contributions from the NYNJ Link consortium.
Over the next decade, estimates show that the US will require over $US7 trillion in infrastructure investment, including both maintenance and upgrades. Macquarie believes that significant US-centred opportunities will exist in critical minerals, particularly downstream, as market evolution and technology advances require large-scale processing and manufacturing in the US over the next decade. Through Macquarie Capital, Macquarie is among the most active advisers globally in critical minerals and has been materially involved in the deployment of Australian capital in large scale offshore critical minerals investment, including in supporting infrastructure.
To support their ongoing expansion into the US, many Australian super funds now have well-established offices and senior executives based in the country, further signalling their commitment to investing in opportunities across the Pacific.
“These super funds are highly sophisticated in the way they operate and assess global investment opportunities. Now that a quorum of Australia’s most regarded super funds has established a presence in the US, we expect this capital to have a meaningful impact in the market, particularly in asset classes such as infrastructure, which is in great need of investment,” says Spillane.
Australian super funds and their rapidly increasing capital represent a key opportunity for the current US administration, state administrations and key authorities as they look to accelerate investment in securing America’s position in critical infrastructure, minerals, industrial manufacturing and technology – in particular, AI. Australia and the US maintain a longstanding bilateral investment relationship, with the US being the leading foreign investor in Australia and Australian capital increasingly meaningful for investment here in the US.
“This capital presents an important and valuable opportunity for the United States. As the Australian superannuation industry continues to grow into the trillions, the savings of millions of Australians have the potential to deliver real-world impact in the US and beyond, while delivering the investment returns Australian retirees need,” says Kuchel.
Macquarie was primary sponsor of the Australian Super Summit, hosted at the Australian Embassy in Washington, DC and the Australian Consulate-General in NYC, in February. Working directly with 18 out of Australia’s 20 largest superannuation funds, Macquarie supports the vital work of growing the retirement savings of Australians which these funds are entrusted to manage.
Learn more
