The industry superannuation fund that services the construction industry, Cbus, has a war chest of more than $2.5bn ready to invest in projects including social housing, infrastructure and Australian companies that have been hammered by the coronavirus crisis, its chief investment officer says.
Kristian Fok said the fund wanted to help build a sustainable economy in the wake of the crisis, which has laid waste to the hospitality, tourism and education industries and sent the sharemarket into a tailspin.
Cbus, which has about $51.8bn under management even after share prices collapsed by as much as 30% due to the pandemic, is jointly run by unions and employers and largely invests on behalf of workers in the construction industry.
“We would like to see, if we’re going to invest any money, that it’s not just about a short-term sugar hit, that they’re things that are going to help us move to the sustainable economy that we need to position ourselves in,” Fok told Guardian Australia.
He said the fund had money ready to spend within the next six months, as Australia emerges from the government lockdowns that have shuttered large parts of the economy.
About three quarters of the fund’s members work in construction, which has so far been spared a shutdown, avoiding mass unemployment in the sector.
This means the fund has been less affected by withdrawals than funds such as Hostplus and Rest, which draw much of their membership from the devastated hospitality or retail sectors.
Fok said withdrawals by Cbus members as the coronavirus hit had initially peaked at about $128m a day but had since subsided to the “high 20 millions” a day.
He said the fund’s first investment priority was “saving businesses and jobs”.
“So, strong businesses that have got cashflow problems because of the shutdown but remain, in the long term, high quality businesses, are now seeking to recapitalise,” he said.
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“The other area that we are now actively engaged in is direct lending – there are opportunities that we looked at and walked away from that we are now having another look at.
He said Cbus would then look to invest in a pipeline of projects backed by governments, including its existing Bright Energy renewables joint venture in Western Australia and affordable housing financed by the National Housing Finance and Investment Corporation.
“I think at this time in particular there’s probably going to be an increasing need for affordable housing as we come through,” he said.
He said the fund was also looking at investing in climate initiatives and in supplying purpose-built housing to people receiving benefits under the National Disability Insurance Scheme.
Further down the track, Cbus’s war chest includes about $1bn ready to invest in infrastructure.
“It’ll be clearly dependent on the finances of both the federal government and the state governments,” he said.
“An example is the rail idea between Melbourne Airport and Spencer St Station, where there has already been a fair bit of progress in terms of discussions around that.
“Clearly in the short term there’s probably not going to be that much demand but it does actually take some time to build.”
