Why Australian Institutions Need You
Australia is one of the world’s most significant and fastest-growing pools of institutional capital. Its superannuation system has surpassed A$4.5 trillion in assets, and the Reserve Bank of Australia projects this will reach A$8.1 trillion by 2035. That makes it one of the largest pension pools on earth, growing faster than the domestic economy can absorb it.
The result is structural, ongoing demand for offshore investment and a particular gap in Asian market exposure that specialist managers are uniquely positioned to fill.
The Numbers
A$4.5 trillion+
A$8.1 trillion
50.9%
Proportion of super assets now invested offshore up from 41% in 2019 and crossing 50% for the first time in 2025 (NAB Super Insights Report)
12%
A$45 billion
Quarterly contributions flowing into superannuation a compounding tide of capital that must be deployed
The Numbers
A$4.5 trillion+
A$8.1 trillion
50.9%
12%
A$45 billion
Why Offshore — and Why Asia
Australian super funds are not investing offshore by choice alone, they are doing so out of structural necessity. The domestic stock market (ASX) is heavily concentrated in financials and mining, and funds now own close to a quarter of it. As assets grow, the domestic market simply cannot absorb the volume of capital being generated. Offshore diversification is the only viable path.
International allocations have risen from 41% in 2019 to over 50% in 2025, a remarkable shift in less than six years. The largest funds, including AustralianSuper (A$341 billion), are now running offices in London, New York, and Beijing, projecting that half their assets will be offshore within years. Smaller and mid-sized funds, without the scale to build global infrastructure, are increasingly reliant on specialist external managers to access markets they cannot reach independently.
Asia — and South-East Asia, Hong Kong, and China in particular — is a primary destination for this reallocation. With US equity exposure under scrutiny and domestic markets saturated, Australian institutions are actively seeking high-quality, locally-managed Asian strategies. The demand is real. The gap is the access.
How Australian Institutions Make Allocation Decisions
Understanding the decision-making process of Australian super funds is essential for any manager seeking to enter this market. The process is rigorous, regulated, and relationship-driven, and it is where APAC Financial Services adds the most value.
Australian super funds operate under the oversight of APRA (Australian Prudential Regulation Authority) and ASIC. APRA’s investment governance standards require funds to conduct formal due diligence before appointing any external manager, covering both investment capability and operational resilience. This is not a box-ticking exercise; APRA actively reviews trustee conduct and has taken enforcement action against funds that have fallen short.
For an Asian fund manager, the allocation process typically involves two distinct assessments:
Investment Due Diligence (IDD)
An assessment of the manager’s investment philosophy, process, team, track record, and risk management. Usually conducted by the fund’s internal investment team or an asset consultant. For Southeast Asian managers, this step is particularly challenging without a local presence: Australian institutions are unlikely to travel for an initial review, and they lack the local market knowledge to evaluate an unfamiliar manager independently.
Operational Due Diligence (ODD)
APAC Financial Services offers outsourced due diligence for Australian investors considering Southeast Asian investment targets, whether infrastructure assets, companies, or funds, delivered through specialist on-the-ground partners across the region and co-signed under our AFSL to meet APRA-standard requirements.
Beyond formal due diligence, Australian institutions invest with managers they know and trust. A warm introduction from a credible, licensed local partner carries significantly more weight than a cold approach from an overseas manager. Asset consultants (firms like Frontier Advisors, Mercer, and JANA) also play a gatekeeping role for many mid-sized funds, and building relationships with them is a key part of any successful distribution strategy.
APAC Financial Services navigates all of this on your behalf, from the first introduction to the completion of due diligence, with the relationships, the licence, and the local knowledge to make the process work.
INVESTING INTO ASIA?
APAC Financial Services also works with Australian institutions seeking to deploy capital into Asian markets. Through our network of specialist on-the-ground partners, we provide outsourced due diligence on Southeast Asian, Hong Kong, and Chinese investment targets — co-signed under our AFSL for Australian-regulated oversight.
Learn more on our Services page.