UniSuper, a $115bn Australian pension fund, has acquired a 5% stake in Vantage Towers, Vodafone‘s former mobile towers business, for A$1bn ($680m). The acquisition makes UniSuper the latest Australian pension fund to look beyond its home market for growth, with Aware Super having already opened an office in Europe last year to invest $16bn there and in the USA over the next three years. AustralianSuper, the country’s largest pension fund, is planning to spend £23bn in Europe and the US over the next five years. UniSuper’s investment in Vantage Towers is its first direct unlisted infrastructure investment overseas.
Sign of Australian Superannuation Industry’s Expansion
The move by UniSuper to invest in Vantage Towers is the latest sign that the Australian superannuation industry is looking to expand outside of its home market. It is the fifth-largest pension system globally with a value of A$3tn. The industry is seeking to diversify its investments geographically, as more “superfunds” look to Europe for investment opportunities.
High-Quality Defensive Infrastructure Investment
UniSuper has a significant portfolio of investments in Australian infrastructure, having backed the A$23.6bn consortium that took Sydney Airport private last year, and it is also the largest shareholder in toll road operator Transurban Group.The investment in Vantage Towers as a high-quality defensive infrastructure investment with strong fundamentals and growth prospects, adding that it is positioned to deliver excellent results for its members over the long term.
Telecoms Infrastructure Investment Diversifies Portfolio
UniSuper’s move to invest in Vantage Towers is part of a broader trend among infrastructure investors, as telecoms companies have sold off steel masts to free up funds to invest in network upgrades. Mobile towers have become a focus for infrastructure investors, as they can generate predictable cash flows due to long-term leasing contracts. According to internal employees, the acquisition will diversify UniSuper’s position in private markets where it is exposed to unlisted office property.
Vodafone’s Vantage Towers
Vodafone carved out Vantage Towers to unlock value on its balance sheet. It floated the Düsseldorf-based company two years ago, retaining a majority stake to retain exposure to the value created by consolidation of the sector. Vodafone moved to delist Vantage and sold 50% of the tower company to serious players of the industry, last year to reduce its debt. Separately, activist investor Elliott acquired 5.6% of Vantage’s voting rights in February.
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