Australian pension funds are growing so much they are now investing in the US, UK and Europe energy, transport and infrastructure projects.
Pension funds are keen to double their investment in Europe (with the UK) in 10 years as the US remains the most lucrative market, the Super Members Council (SMC) says.
A new SMC report on Australian investment in Europe predicts that more than $660 billion will be invested there by 2025 while it is likely to hit the $1.5 trillion mark in the US by 2030.
The report was commissioned by Australian-owned IFM Investors and the SMC, and released just before an Australian team visited the UK looking for more investments; a similar team had visited the US in February.
The SMC says Australia is home to the fourth-largest retirement savings pool globally; every week, about $4 bn flows into its current $4.3 tn pool.
The report projects Aussie super will become the second largest in the world by 2035 and stand at $8.3 tn, overtaking the British and Canadian systems but behind the US.
As capital grows, pension funds are expanding internationally to diversify risk and capture strong returns; the report notes that overseas investments rose from 41% to 47% in the last 10 years.
The report also reveals:
- As of mid-2025, Australian pension funds invested $83 bn in the UK and $181 bn in the EU or nearly one of every five dollars invested overseas.
- By 2035, investment is expected to reach $203 bn in the UK and $460 bn in the EU with an annual growth rate of 10-11% up to 2035.
The report also reveals that private market investments in Europe is not as large as public investments, yet, but it continues to grow.
“Australian pension investors have deep expertise in infrastructure investment, which makes them a sound and reliable solution when it comes to helping meet the infrastructure needs of UK and European societies,” said IFM Investors Head of Global External Relations David Whiteley.
Australian capital is funding Europe’s energy transition, digital infrastructure and transport renewal including renewable energy and storage projects and industrial decarbonisation, fibre-to-home broadband in Germany, and airports, transport and energy projects in the UK.
“Australia’s pool of retirement savings is growing at such speed and scale that the world’s biggest economies are competing for our pension capital,” SMC chief executive officer Misha Schubert says.
“(That) means more money in retirement for Australians and finance that supports critical infrastructure projects and jobs in the UK and Europe.”
US TOPS WITH PENSION FUNDS
As Australian pension funds scour the globe for the best returns, the US remains the top destination.
An IFM Investors report based on analysis from the SMC and Mandala Partners says Australian pension fund investments in America is expected to more than double over the next decade – from $617 bn to over $1.54 tn.
In his recent meeting with Prime Minister Anthony Albanese, US President Donal Trump welcomed the news, saying “this unprecedented investment will create tens of thousands of new, high-paying jobs for Americans”.
Australia’s current pension assets total about $4.32 tn; as that capital continues to grow, funds are looking overseas with international investments more than doubling since 2014.
The report finds there are more investment opportunities in the US; private market investments could surpass $370 bn by 2035 while funding in American infrastructure could grow from $30 bn today to $169 bn in 10 years across roads, ports and logistics, data centres, energy and telecommunications.
Whiteley says Australia has built one of the world’s most successful pension systems.
“We already have a significant footprint in the US but now is the right time to invest more. Based on existing trends, Australian pension funds are forecast to have over $4 tn invested outside Australia by 2035,” he says.
SMC executive general manager strategy and insights Matt Linden says Australia’s pension funds are so large “they need to scour the globe to find the best investment deals”.
“There is a great opportunity to unlock further investment opportunities for Australian super fund members in the US – the world’s largest market. In a win-win the US economy benefits from Australian pension fund investments strengthening and growing their businesses,” he says.
Mandala’s managing partner, Amit Singh, who produced the report, says their analysis shows that Australian pension funds are becoming major global investors with investments in the US alone expected to reach $1 tn by 2035.
“Australian pension funds have grown beyond just domestic investments to become global players,” he says.
“Our research shows this trend will continue, especially in US private markets and infrastructure like roads and energy, which match well with Australian investors’ long-term outlook.”
ANALYSIS LIST
- From 2001–23, Australia’s cumulative contribution inflows reached 180% of GDP, the highest among OECD countries and well above the OECD average.
- Australia is the only OECD country whose spending on age pension is due to fall, from 2.5% of GDP to 2% by 2060. The average proportion of GDP spend on pensions across the OECD is 9.3%.
- The proportion of Australians receiving full age pension is due to fall from 44% today to 21% in 2062-63.
- Australia has the 55thhighest population but the fourth largest pool of pension assets. Source: Super Members Council
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