Mercer Superannuation Australia is introducing private equity into its default pension investment options for the first time, reflecting a broader trend among Australian retirement funds seeking greater portfolio diversification.
With A$75 billion in assets under management, Mercer plans to start allocating capital this year, targeting a 5% allocation in its default investment options—those chosen automatically for members. Chief Investment Officer Graeme Miller said much of the capital will be directed toward secondaries and co-investments, which offer attractive entry points into the asset class.
“The market is seeing more companies remain private longer,” said Miller, who joined Mercer from TelstraSuper earlier this year. “That shift makes private equity increasingly important in building diversified portfolios.”
This move aligns Mercer with other major Australian superannuation funds ramping up private equity allocations. Colonial First State is also deploying retirement capital into private equity for the first time this year, while AustralianSuper—Australia’s largest super fund—recently announced plans to finalize partnerships with four private equity managers.
Miller explained that Mercer’s decision comes amid concerns over stretched valuations in U.S. equities and presents a timely opportunity to access private markets at a relative discount. He emphasized that secondary deals, in particular, can offer value due to discounted pricing relative to asset fundamentals.
Globally, private equity has seen a quieter year. Fundraising fell 35% in Q1 2025 to US$116 billion versus the same period in 2024, driven by softer deal activity and fewer IPOs, according to PitchBook.
Source: The Business Times
