HESTA awards global private equity mandate

HESTA has issued a $250 million global private equity co-investment mandate to Stafford Capital, dubbed QP4.

Stafford's Australian private equity lead Daniel Bowden said that this strategy seeks to tap into smaller deal sizes, providing access to a broader spectrum of private equity investment opportunities.

He also said that single-asset style continuation vehicles, where HESTA would represent long-term patient capital, was an area of focus.

"HESTA, as a large institutional investor, is looking for investment opportunities of appropriate scale that can be efficiently executed. This can mean that potentially strong-returning smaller deals may be more difficult to access," he said.

"... QP4 enables Stafford to access and complete smaller strong-returning deals on behalf of HESTA."

HESTA head of portfolio management Jeff Brunton said the continued development of the relationship with Stafford demonstrates how the fund was looking to collaborate with key investment partners.

"We see this co-investment vehicle as effectively an incubator for ideas around certain thematics and gives us valuable perspectives around expertise and successful businesses that can lead to further deal flow. This is a great example of how we're looking to leverage cutting-edge thinking from across our ecosystem of investment partners to help generate ideas and innovation across the portfolio," he said.

"It's this total portfolio approach that's effectively bringing the best global investment thinking to our decision making, which helps us to continue to deliver strong, long-term investment returns for members."

The prior $200 million global private equity co-investment mandate, QP3, was fully invested in three years.

Stafford reported that it's currently generating strong risk-adjusted returns - but the precise figure remains undisclosed.

HESTA has more than $1 billion invested with Stafford, which has been managing capital on behalf of the fund since 2003 across multiple strategies, including a responsible investment focused mandate.

Despite the broader trend of super funds cutting external mandates, HESTA awarded the second most external mandates in 2023 (21) - the largest being a $1.5 billion global fixed interest credit mandate to J.P. Morgan.