AusSuper teams up with Churchill AM for private credit

Oksana Patron

19 December 2022

Australia’s super fund, AustralianSuper has entered into partnership with Churchill Asset Management, a US$42 billion private capital investment-specialist of Nuveen, with an ambition to triple its exposure to global private credit, particularly in the US market.

The new partnership, with initial instalment of US$250 million, will invest in traditional senior and unitranche loans to private equity-backed US middle market companies.

AustralianSuper, which has currently over US$4.5 billion (A$7 billion) committed to private credit globally and plans to triple its exposure in the next years through a mix of direct lending and strategic partnerships, said it expected its US$175 billion (A$260 billion) global investment portfolio to more than double over the next five years.

AusSuper’s head of private credit, Nick Ward, said the fund would “work selectively with managers that can demonstrate disciplined performance across market cycles” while expanding its US private credit portfolio.

According to Churchill AM, the US middle market senior lending remained attractive due to its floating rate nature of the investments, strong current income potential, significant lender protections and senior position in the capital structure.

“Churchill’s partnership with AustralianSuper demonstrated our ability to develop customised investment structures that align with our clients’ priorities, allowing us to grow our third-party separately managed account business to nearly US$9 billion,” Churchill’s president and chief executive, Ken Kencel, said.

After setting up its New York office in 2021, AustralianSuper is now expanding its specialist US investment team which will focus on growing its private credit, private equity, infrastructure and property.

Nuveen’s investment specialists have been managing AusSuper mandates in Europe and the United Kingdom.