Australian pension funds cautious on US energy investments

Some of Australia’s biggest pension funds are being cautious about investing in US energy assets. This comes due to uncertainty around policies for renewable energy and fossil fuel projects in the US. Cbus Super, which manages about A$100 billion, believes that many large investors will hold off on new investments until after the US midterm elections in 2026. Aware Super, another major fund, plans to be careful about choosing which energy transition assets to invest in. Both funds recently attended an investment summit in the US that showcased Australia’s A$4.2 trillion pensions industry. Jordan Kraitan, from Cbus, noted that the US political landscape is highly divided on energy issues. This division makes many investors hesitant. He mentioned that they are also worried about the uncertain future of fossil fuels. However, not all investors are waiting. Rich Nuzum from Mercer remarked that many funds are eager to take risks to stay ahead of their peers. Deanne Stewart, CEO of Aware Super, mentioned that her fund is looking at major trends in the US economy, particularly in digital assets, which have support from both major political parties. She stated that they will be selective with energy transition projects, ensuring they have long-term viability regardless of political changes. Australia’s pension system is expected to grow and become the second-largest retirement system in the world by 2031, after the US.