WATCH: Why First State Super bets on weather

The A$84bn pension fund sees water as the ultimate diversifier but is now willing to take more risk through a private equity-like strategy, says associate portfolio manager Brent Snow.

Australian super funds’ reluctance to invest in their own backyard is well documented – and indeed, sometimes, exaggerated. Several savvy institutions already have a robust program for doing just that, and First State Super, a pension that manages more than A$84 billion ($62 billion; €53 billion), is one of them.

A key plank of the strategy is water, which Brent Snow, associate portfolio manager for infrastructure and real assets, describes as low-risk because it flows to every agricultural commodity. Another is sale and leaseback, which First State initiated in 2015 when it acquired more than 4,000 hectares of almond orchards and land. The third prong, however, is new – find out more about it by watching our video, where we single out each component of the pension’s ag program.