Canada and Australia are tying together two of the world’s largest retirement systems through a new investment pact that aims to push more pension capital into both markets.
More than a dozen Canadian and Australian pension giants have entered a first-of-its-kind memorandum of understanding (MOU) under the Canadian-Australian Pension Funds Investment Initiative (CAP Invest Initiative).
CPP Investments said the initiative asks leading pension investors to make a voluntary commitment “to facilitate dialogue on investment environments and policy barriers to generate solutions that unlock greater opportunities for value creation.”
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Under the arrangement, funds will cooperate to channel more pension capital into opportunities in both markets.
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Signatories include AustralianSuper, which manages A$410bn (US$289bn), and the Canada Pension Plan Investment Board, with $781bn (US$571bn) in assets, along with eight other major Canadian funds.
Canada operates the world’s second-largest pension system, while Australia’s A$4.5tn pool is No. 4, and Canada’s system is forecast to reach $8tn while Australia’s is projected to swell to A$11tn by 2040.
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The only problem I see is that Canada and Australia have fairly similar industrial composition. Would be good to include some European countries too.