AustralianSuper has secured a partnership with Churchill Asset Management, based in New York, according to a press release. The transaction will begin with an initial installment of $250 million, but will grow overtime.
“AustralianSuper is looking to work selectively with managers that can demonstrate disciplined performance across market cycles as we expand the U.S. private credit portfolio,” Nick Ward, AustralianSuper head of private credit, said. “Churchill has a strong long-term track record of market leadership, and we look forward to building a long-lasting partnership with the team at Churchill and Nuveen.”
Through this collaboration, both parties hope to invest in traditional senior and unitranche loans to private equity-backed U.S. middle market companies.
With more than $4.5 billion invested in private credit worldwide, AustralianSuper hopes to invest three times that amount over the course of the next few years. They will do this by working with their own team and also by partnering with other companies that are experts in this field. One of these partners is Churchill, which is a company that manages $42 billion in private capital. Churchill has been investing in middle market senior loans for 16 years and is very active in this field, investing over $14 billion each year. Recently, Churchill was named the top "U.S. buyouts lender" by Pitchbook's League Tables.
According to Ward, the fund is working in collaboration with aligned managers who have accumulated long-term track records as it expands its global private credit footprint across the U.S. market.
“We are excited to partner with AustralianSuper, a leading and well-respected global investor. Churchill's partnership with AustralianSuper demonstrates our ability to develop customized investment structures that align with our clients' priorities, allowing us to grow our third-party separately managed account business to nearly $9 billion,” President and CEO of Churchill, Ken Kencel, said.
AustralianSuper's slate of global investments, estimated to be worth $175 billion, will likely increase over the course of the next five years. The fund has made a series of expansion efforts, including the opening of an office in New York in 2021, intended to focus on private credit, private equity, infrastructure and property.
“We believe the opportunity in U.S. 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,” Kencel said. “We look forward to helping AustralianSuper achieve its investment objectives by providing differentiated access to our directly originated, proprietary senior loan assets.”
AustralianSuper was recently listed as one of the top 20 largest pension funds in the world. The fund's partnership with Nuveen, a financial services company, will help it to achieve this growth.
“Nuveen's investment specialists in the United Kingdom and Europe have been successfully managing mandates for AustralianSuper for several years now,” Head of Nuveen in Australia, Andrew Kleinig, said. “We are pleased that through Churchill, we will be able to continue delivering for AustralianSuper and its members.”