Bridging the gap: the opportunity for Australian pension capital in the UK and Europe

Australia has built one of the world’s most successful pension systems.

With A$4.3 trillion (£2.1T; €2.4T) in assets under management as of June 2025, Australian pension funds form the fourth-largest pool of retirement savings globally, behind only the US, Canada and the UK. Assets have grown strongly over the past two decades, supported by mandatory contributions, preservation rules, and competitive fund structures. 

As the system has matured, Australian pension funds have steadily expanded their international allocations to help diversify risk and access the best investment opportunities globally to deliver long-term risk adjusted returns for workers' retirement savings. In the past decade, overseas investment has increased to nearly half of pension funds’ portfolios. 

This report, by IFM Investors in partnership with Super Members Council Australia and Mandala Partners, projects the scale of Australian pension capital investment in the UK and European Union over the next decade – revealing private markets investments will continue to grow. Total investment is set to more than double over the next decade to over A$660 billion (£323B; €370B), including A$203 billion (£99.2B; €113.7B) in the UK and A$460 billion (£224.8B; €257.7B) in the EU.Australian pension funds have deep expertise in infrastructure, which positions them as natural partners in meeting Europe’s investment needs.

But unlocking the full potential of this capital will require policy settings that streamline regulation, accelerate planning and ensure predictable revenue frameworks in key sectors.