Mercer Superannuation Australia, which oversees AUD75bn ($49bn) in retirement assets, is set to introduce private equity into its default pension options for the first time, marking a strategic shift as superannuation funds increasingly diversify into alternative assets, according to a report by Bloomberg.
The fund will begin deploying capital to the asset class in 2025, targeting a 5% allocation within its default MySuper investment option, where the majority of its members are automatically enrolled. The new allocation will be focused primarily on secondary transactions and co-investments, according to Chief Investment Officer Graeme Miller.
The move aligns Mercer with a broader trend among Australia’s superannuation sector, which manages AUD4.1tn in assets. Colonial First State is also expected to enter the private equity space this year, while AustralianSuper recently disclosed it is finalising mandates with four private equity managers to further build out its allocation.
Mercer’s timing reflects a broader tactical repositioning, as the fund adopts an underweight stance on US equities following a period of strong performance relative to private assets. Chief Investment Officer Graeme Miller adds that current market conditions present a favourable entry point, particularly in the secondaries space, where pricing often reflects a discount to underlying asset valuations amid subdued deal activity.
Global private equity markets have seen a slowdown in 2025, with fundraising in Q1 falling 35% year-on-year to $116bn, according to PitchBook. The contraction has been driven by lower deal volumes and a sluggish IPO market, offering potential opportunities for patient capital.
