Super funds: where the bloody hell are you?

Why I’m writing this

I chuckled when I read AustralianSuper’s article. Then I checked whether I was being unfair.

Last week AustralianSuper published an article called “Backing the next generation of Australian success stories”,1 in which they detailed their commitment to venture capital. This made me chuckle, and I thought to myself, what utter hogwash.

Over the past 10 years I’ve had countless conversations with super fund executives, and they tend to follow a similar pattern. They’re proud of securing allocations to top-tier US firms. They say they know Australian VC is important, but they’re still developing their strategy and the timing isn’t quite right. They explain that their size makes it hard to write a $25–100 million cheque economically, so they can only invest in $1 billion funds. And fees are always a concern.

However, after my wry chuckle, I thought that maybe I was being unkind, and that super funds in this country really are committed to supporting the next generation of Australian founders. So I crunched the numbers to find out if a decade of anecdotes from my meetings was supported by the data.

It is. Australia invests 0.18% of GDP in venture capital, compared with 1.8% in Israel, 1.05% in the US and 0.8% in Singapore. 13 of the 20 largest super funds have no public commitment to Australian VC. Although there are a couple of bright spots (thank you, Hostplus), for the most part super funds in this country do not support Australian venture.

0.34%

Share of AustralianSuper’s fund in Australian VC. It was 0.38% in 2020.

15 of 20

15 of the 20 largest super funds don’t disclose how much they invest in Australian VC

0.18%

Australia’s VC investment as a share of GDP. The US is 1.05%. Israel is 1.8%.

Below you’ll find:

• More detail on AustralianSuper’s investments in Australian VC
• Analysis of the top 20 super funds and their allocations to Australian VC
• A comparison of how countries, and the funds in those countries, invest in VC
• The reasons super funds give for not investing in Australian VC

If any of my sources are out of date, let me know and I’ll update them.

Lastly, I don’t think Tall Order will ever raise money from super funds. They’ll grow larger more quickly than we will grow into them. Our investors include state governments, universities, family offices and high-net-worth individuals. However, there is global precedent from overseas fund managers to establish emerging manager programs to increase diversity in both investments and investment managers. I’ve included some info on this below too.

Australia’s largest fund

AustralianSuper puts 34 cents in every $100 of members’ money into Australian VC, less than it did in 2020.

AustralianSuper has more than doubled the dollars it invests in Australian VC, from about $700 million in 2020 to more than $1.5 billion today. However, over the same period its funds under management grew from $182 billion to $440 billion. That means its allocation to Australian VC as a share of FUM has actually fallen, from 0.38% to 0.34%.

AustralianSuper’s $1.5 billion in Australian VC commitments works out to $3.40 in every $1,000 of members’ money. It invests through just three managers (Blackbird, Square Peg and AirTree), out of the roughly 108 managers behind Australia’s 150 registered early-stage VC funds.39 Of its $22.7 billion private equity portfolio, $18.7 billion (82%) is invested overseas.3 Between 2012 and 2016 it held almost nothing in Australian VC, and it only began to scale up from 2019.

AustralianSuper · Australian VC as a share of the fund

~0%

0.02%

0.18%

0.38%

0.34%

2012–16

2017

2019

2020

2026

2020 uses the A$700m in AustralianSuper’s 2020 annual report. Its October 2026 article says it had “around $600m” five years ago, which would put 2021 at 0.26%. Both are commitments.

Australia’s 20 largest super funds

Of the 20 largest super funds, Hostplus is the only one that invests a meaningful share of its fund in Australian VC.

These 20 funds manage about $2.4 trillion. Only seven have any public commitment to Australian VC, and only five publish a figure that can be measured as a share of the fund. The table below shows every public figure I could find.

Australia’s 20 largest super funds · Australian VC as a share of the fund

Every public figure I could find

#	Fundand what’s public	AssetsA$bn, Jun 2025	Earlier% of fund	Latest% of fund
1	AustralianSuperBlackbird, Square Peg, AirTree.21	388	0.38%2020 · A$700m	0.34% ↓2026 · A$1.5bn
2	Australian Retirement TrustAirTree LP since 2016 (Sunsuper), Square Peg. Describes itself as underweight VC. No amounts.2344	334	n/d	n/d
3	Insignia FinancialMLC, IOOF, OnePathNothing public. Three trustee funds combined.	202	n/d	n/d
4	Aware Super2015: A$110m Blackbird II + A$120m Brandon (FUM ~A$59bn). Now includes TelstraSuper, which committed A$35m to IP Group (2017). No domestic figure since.451848	199	0.40%2015 · A$230m	n/dAll VC ~1.6% 2024 est., mostly offshore
5	UniSuperUniseed only.2021	145	0.07%2022 · A$75m	0.06% ↓2026 · A$100m
6	HostplusBlackbird, Square Peg, Artesian, Brandon, Carthona, IP Group. 2022 domestic share from CIO’s ~70% split.106	133	1.4%2017 · A$350m	2.6% ↑2022 · ~A$2.1bn · est.
7	AMPAMP Super, NorthNothing public. Two trustee funds combined.	126	n/d	n/d
8	Colonial First StateNothing public. FirstChoice plus Avanteos.	120	n/d	n/d
9	CbusNothing public.	102	n/d	n/d
10	RestPE 3.5% of fund. VC only via venture secondaries (StepStone).46	98	n/d	n/d
11	HESTANamed LP in Blackbird VI, Brandon 6, Synthesis Capital. No amounts.13	96	n/d	n/d
12	CSCPSS, CSS, Military Super, PSSapNothing public. Invested assets only; excludes unfunded defined-benefit liabilities.68	80	n/d	n/d
13	Mercer SuperNothing public. Includes ex-BT Super.	79	n/d	n/d
14	WestpacBT Panorama, ASGARDNothing public. Investment platform.	78	n/d	n/d
15	CareSuperNothing public. Includes ex-Spirit Super.	58	n/d	n/d
16	Macquarie SuperNothing public. Investment platform.	49	n/d	n/d
17	Brighter SuperQueensland startup mandate managed by QIC.47	35	n/d	0.14%2025 · A$50m
18	HUB24Nothing public. Investment platform.	34	n/d	n/d
19	EquipTogethrNothing public.	33	n/d	n/d
20	NetwealthNothing public. Investment platform.	30	n/d	n/d

Outside the top 20: NGS Super LP in Blackbird (2022) and Main Sequence III (2023). Amounts not disclosed.49 Prime Super A$130k in a VC trust at June 2023, effectively 0% of the fund.50

How Australia compares

We invest less in VC than the countries we like to compare ourselves with, and most of our super funds lag their overseas peers.

Panel A · Countries · 2025

VC invested in startups

% of GDP Per person

Israel

1.80%

United States

1.05%

Singapore

0.80%

Finland

0.69%

United Kingdom

0.60%

Canada

0.25%

Australia

0.18%

View as table

Country	Invested 2025US$bn	Per personUS$	% of GDP	Notes
Israel	11	1,080	1.80%	IVC-LeumiTech. Startup Nation Central reports US$15.6bn (2.55% of GDP).24
United States	320	936	1.05%	PitchBook-NVCA. Inflated by AI mega-rounds.25
Singapore	4.6	754	0.80%	EnterpriseSG / EY-Parthenon.26
Finland	2.16	385	0.69%	FVCA. One deal (Oura) is ~40% of the total; 0.27% of GDP without it.27
United Kingdom	23.6	338	0.60%	HSBC Innovation Banking / Dealroom. UK Private Capital’s narrower measure gives 0.27%.28
Canada	5.7	137	0.25%	CVCA.29
Australia	3.3	119	0.18%	Cut Through Venture: A$5.1bn across 390 deals.30

Panel B · Investors · Latest available

VC as a share of the fund

Ontario Teachers’Canada

6.0%

HostplusAustralian super · estimate

2.6%

CalPERSUS · estimate

2.0%

Future FundAustralia · stale, 2018

2.0%

Aware SuperAustralian super · estimate

1.6%

CalSTRSUS · estimate

1.0%

UK DC schemes

0.50%

Australian super, all fundsEstimate, upper bound

0.50%

Australia’s VC as % of GDPYardstick

0.18%

AustralianSuper

0.34%

European pensionsAverage

0.12%

UniSuper

0.06%

View as table

Investor	VC %of assets	Measure	Year	Confidence
Ontario Teachers’ (Canada)	6%	Venture & growth, % of assets	2025	Reported31
Hostplus	2.6%	Domestic VC, % of FUM (A$2.1bn of A$80bn)	2022	Estimate6
CalPERS (US)	2%	VC, % of assets (derived from PE commitments)	2024	Estimate32
Future Fund (Australia)	2%	VC, % of assets	2018	Stale34
Aware Super	1.6%	All VC (mostly offshore), % of FUM	2024	Estimate18
CalSTRS (US)	1%	VC, % of assets	2024	Estimate33
UK DC schemes	0.5%	VC, % of DC assets	2025	Reported35
Australian super (all funds)	0.5%	VC, % of assets (upper bound)	2026	Estimate38
AustralianSuper	0.34%	Domestic VC commitments, % of FUM	2026	Reported1
European pensions (avg)	0.12%	VC, % of assets	2025	Reported36
UniSuper	0.06%	Known domestic VC commitments, % of FUM	2026	Reported21

The reasons

Here are the five reasons super funds give for not investing in Australian VC.

Size

Super funds want to write $200 million cheques. In their minds, a $25 million or $50 million cheque needs the same due diligence as a $500 million one, so smaller cheques are uneconomic. Yet $200 million is only 0.05% of AustralianSuper’s fund. For context, only 18 Australian funds made five or more seed investments last year, compared with 598 in the US.41

Track record

Super funds want to see DPI (distributions to paid-in capital, or the cash actually returned to investors). We agree that DPI is the litmus test of a good funds management firm. However, venture-backed companies take around 10 years to grow up, so DPI is one measure of a fund manager’s performance, and a late one.

There are many leading indicators that can be used to assess a fund manager’s performance well before then: follow-on rounds led by top-tier investors, markups at arm’s-length prices, the quality of co-investors, revenue growth across the portfolio, and the deals into which the team can gain access.

Reputation

I’ve been told that investing with a smaller manager carries reputational risk. Established managers and asset classes are hardly free of it. Macquarie has agreed to repay $321 million to around 3,000 super members who were put into the collapsed Shield Master Fund through its platform.59 ASIC has taken action against Diversa over the First Guardian collapse, and Netwealth has admitted contraventions. Together, the two schemes took around $1.1 billion from about 11,000 people.60 And AustralianSuper itself wrote off its $1.1 billion investment in Pluralsight, a Vista Equity buyout, in 2024.67

In 2024, APRA found that 12 of the 23 super trustees it reviewed needed material improvements in how they value unlisted assets such as property and infrastructure.61

Fees

Venture capital funds typically charge a 2% management fee, and super funds worry about the regulator’s focus on fees. A 2% fee on a $25 million commitment is $500,000 a year. For a fund managing $440 billion, that’s about one ten-thousandth of one per cent of its assets.

The performance test

Super funds cite the government’s performance test as a barrier to investing in VC. The test measures VC performance against listed share markets, and a fund that fails it twice in a row can’t take on new members. The issue is that VC funds follow a J-curve: they dip in value in the early years before the successful companies come through.

In any case, the test hasn’t stopped several of the largest super funds from investing with US VC firms, many of which charge higher fees than Australian managers. And AustralianSuper itself told Treasury the test is not a material constraint on its VC portfolio.70

I do think the performance test should change, and Treasury is proposing amendments that would measure VC against inflation rather than share markets.71

Emerging manager programs

Overseas, some of the biggest investors invest with emerging managers on purpose.

Emerging manager programs are becoming increasingly popular with large pension funds and governments around the world. They solve the cheque-size problem and invest with a more diverse group of managers. Here are five examples.

Why it matters

Super funds have been handed a privileged position, and with it comes a responsibility to the Australian economy.

The federal government has given super funds an extraordinary gift. Every Australian employer must pay 12% of their workers’ wages into super.64 That is a guaranteed and growing stream of capital that no other investor in the country enjoys. With it, I believe, comes a responsibility to play a role in supporting the Australian economy.

Our biggest challenge as a country is productivity. Productivity growth over the decade to 2020 was the slowest in 60 years,62 and real wages have barely moved. A wage of $100,000 in 2010 has grown to $153,270 today, but it buys only what $152,701 would have, a real increase of just 0.4% in 16 years. Venture-backed companies have an important role to play in our economy. They tend to grow faster, hire more people and invest more in R&D. In the US, companies that were venture backed make up 41% of the stock market’s value and account for 62% of public company R&D spending.63

Rightly or wrongly, because super funds form such a large part of Australia’s investment landscape, they are partly responsible for how much, or how little, this country invests in venture capital. Today, offshore investors provide 41% of our early-stage capital, compared with 21% in the US and Europe.41 Companies funded from overseas tend to end up owned and listed overseas, and super funds end up buying them back later, in US dollars, at a much higher price.

So, Australian super funds: where the bloody hell are you?

You manage $4.8 trillion of Australians’ retirement savings. Investing just 0.1% a year (similar to the rates in France and Finland)2765 would almost double the amount of venture capital flowing to Australian startups.30

The fact that Australia’s venture industry is young isn’t a reason to hold back, as emerging managers around the world have demonstrated. Just because something is hard doesn’t mean it shouldn’t be done. We see this every day with the founders in our portfolio.

And if you’re a private investor, you don’t have to wait for super to show up. Family offices, high-net-worth individuals, universities and state governments are already investing in Australian VC, and they can move faster and write the smaller cheques that super funds say are uneconomic.

Australian super · A$4.77 trillion

If Australian super committed this share of its assets to Australian VC each year

Share of assets a year0.10%

0.05%0.50%

A year for Australian VCA$4.8bn

Of all the money Australian startups raised in 2025A$5.1bn0.9×