Australia’s US$106 billion Aware Super fund has started recruiting for its planned new London office, hot on the heels of Canada’s Healthcare of Ontario Pension Plan’s (HOOPP) announcement that it is opening an office in the British capital as part of its plan to diversify its geographical exposure and expand its holdings in alternatives.
Aware Super plans to set up its first overseas office in London in November and is looking to North America for the second, according to Reuters. The London office will initially focus on private equity, property and infrastructure in the UK, Europe and North America, but a North America office will open next as the fund seeks to double its global real asset exposure to 40% - a target that is impossible if it focuses only on Australia.
The moves by Aware Super and HOOPP follow the announcement in February by the C$233 billion (US$173 billion) British Columbia Investment Management Corporation (BCI) that its infrastructure and renewable resources team was opening an office in London as the base for its European operations.
Global SWF analysis shows that London is the single biggest concentration of overseas offices by state-owned investors with a total of 27 overseas offices operated by sovereign wealth funds and public pension funds, ahead of New York City’s 24 offices. In terms of staffing headcount, London is also supreme with nearly 1,300 personnel compared to NYC’s ~1,220. Both cities are far ahead of Singapore, Hong Kong and San Francisco in terms of both offices and head count.
Often countries have different financial and political capitals: the USA (NYC and Washington), China (Beijing and Shanghai) and India (Delhi and Mumbai). Together, Beijing and Shanghai have 14 offices of overseas state-owner investors, while Mumbai and Delhi have 10. Even so, these Asian powerhouses still fall behind London and NYC.
Yet, sovereign investors have set up VC teams in London without much success. In 2016, Malaysia’s Khazanah opened an expensive office in Qatar-owned The Shard to focus on VC, which it closed three years later. OTPP and GIC have very selected team members in London, despite having full-fledged VC programs (Teachers’ Venture Growth and Technology Investing Group, respectively). And Mubadala Ventures’ presence has mostly played an oversight function of the US$15 billion stake in Softbank Vision Fund.