A concentrated bet on fewer, better GP relationships is paying off for one of Australia’s largest superannuation funds. Built on selective manager and deal selection rather than a broad roster, the A$112 billion ($78 billion) Rest Super delivered private equity returns more than double the peer average last financial year, as the fund proactively courts top-tier PE firms instead of waiting to be approached.
Having joined from the Future Fund in 2020, head of private markets Marina Pasika, who built Rest’s private equity program from the ground up, says the fund has an intentionally different approach from its Australian peers since inception.
“The program’s only now starting to get into maturity – I’m not sure we can even call it mature yet – it’s starting to look the way that we would actually expect it to look on an annual basis,” she tells Investment Magazine, sister publication of Top1000funds.com, in an interview.
“We’ve very intentionally built exposures to managers that we think deal on deal, fund on fund, can generate very strong returns, backed by genuine operational change and value add,” she says, rather than focusing on leverage or multiple expansion that the private equity industry has used to power its outsized returns.
One manifestation of this selective approach to external partners is that Rest didn’t wait for good managers to come to its doorstep. It sought out managers investing in areas Rest is interested in, many of whom aren’t travelling to Australia or even looking to raise new funds.
“We did our own market research, we built our own theses on the space about where we wanted to invest,” Pasika says, adding that Rest currently has 17 private equity managers and wants to keep the roster tight at under 20.
Another point of difference is that Rest’s internal PE team, though not a large outfit, is a unified operation that works across the deal spectrum from due diligence and manager selection to fund and co-investments.
“Some of our peers that are much larger than us have separate teams for funds, for co-investments; there are advantages that come with specialisation,” Pasika says.
“But we’ve actually found a lot of power to having all the knowledge in the one team that can create this flywheel effect between having really close relationships with managers and doing the co-investments and monitoring those co-investments as well.”
Though representing only a small part of the portfolio at a 3.5 per cent allocation, Rest’s private equity book returned 26.7 per cent in the 2026 financial year against an 8-11 per cent peer average, as estimated by local ratings house Chant West. The deal powering that number was the sale of data and analytics firm With Intelligence to S&P Global – which was also Rest’s first co-investment exit – in which the fund invested $50 million in 2023 and exited at three times the valuation and with a 60 per cent IRR.
The fund is targeting a five per cent allocation to private equity by the end of this year, gaining diversified exposure to managers and deals via fund investments while pushing down cost with co-investments, which the fund only does on a fee-free basis.
Rest has the advantage of having young members, with a million under the age of 30, which gives the fund a long investment horizon and ample cash inflows. With constrained exits in private equity in recent years, Pasika says Rest is seeing pockets of opportunities in secondaries.
“I would say secondaries in general have been expensive to access,” she says.
“We’re definitely happy to invest in secondary trades, where we can position ourselves as that liquidity provider to generate outsized returns, but we’ll only do so if we can without burdening the fee budget.”
Its current exposure in secondaries includes a GP-led single-asset continuation vehicle in private equity – a structure which it might employ in other private asset classes over time – as well as direct venture secondaries through an SMA with StepStone.
“[The StepStone investment] has gone really well so far. Traditional LP secondaries are typically less attractive from a fee perspective for us,” she says.
Infrastructure represents the biggest part of the private markets book at an 11 per cent allocation, followed by 8.5 per cent in property and 1.5 per cent in alternatives.
Since officially taking the helm in May, one initiative Pasika has been driving across the team is breaking down silos and getting out of the habit of thinking in asset class buckets – although she stops short of saying the fund is using a total portfolio approach.
“Ultimately, investing is about taking well-compensated risks and building a portfolio that takes a variety of compensated risks that are not too correlated. It’s not about does it fit in an asset class bucket that we have, or does it meet some precisely prescribed return number,” she says.
“It probably sounds like a total portfolio approach, but I wouldn’t say that we’re religiously following any particular approach as such.”
The fund will continue to invest in private markets informed by its so-called 4D framework of investing: decarbonisation, digitisation, demographics and deglobalisation.
“We are not chasing them as thematics; we are using them as a lens through which to see the investment universe, and that’s the distinction,” she says.
“We’re very much approaching it as a whole of private markets. The opportunities fall out where they fall out, and we bring in the skill sets that are relevant for the best for the best investment for our members.”