IFM Investors, the A$260 billion investment manager supported by Australian industry superannuation funds, has announced it will wind down its private equity division. The decision comes as the company faces challenges in achieving growth that aligns with the rapidly expanding A$4.3 trillion pension system. IFM Investors manages investments across infrastructure, debt, listed equities and private capital on behalf of institutional investors. IFM is owned by 20 of Australia’s largest pension funds.
The need for superannuation funds to deploy increasing amounts of capital is driving a shift towards larger offshore public and private markets. These markets offer the scale necessary to absorb the substantial contributions from Australia’s growing superannuation system. This trend places Australian middle-market private equity funds at a disadvantage, as they are often overlooked in favour of larger, global buyout firms capable of managing greater capital inflows.
According to IFM chief executive David Neal, the decision to close the private equity fund was a difficult one. However, Neal stated that the move is ultimately in the best interests of the company and its long-term strategic objectives, given the evolving dynamics of the investment landscape and the increasing demands of the superannuation sector. IFM will now concentrate on other areas.
The wind-down marks a significant shift in IFM’s investment strategy, reflecting the broader challenges faced by domestic fund managers in a market increasingly dominated by large, global players. The closure of the private equity division indicates a recalibration of IFM’s approach to capital deployment, focusing on sectors and markets where it can achieve greater scale and impact.
