Colonial First State to Capitalize on Trade War Turmoil with Unlisted Asset Push

Australian pension and wealth manager Colonial First State (CFS) is poised to take advantage of market volatility fueled by ongoing trade wars to strategically invest in unlisted assets across various sectors and locations, Bloomberg reports.

With A$161 billion ($97.4 billion) under management, CFS is significantly increasing its allocation to private markets, aiming to move from its current 5% to over 7% of total investments within the next 3-5 years.

Chief Investment Officer Jonathan Armitage revealed the strategy in a recent interview, highlighting the firm’s strong liquidity position as a key advantage.

This move comes as Australia’s A$4.2 trillion pension industry holds approximately one-fifth of its assets in private markets, positioning CFS as significantly underweight compared to many of its peers. The industry also has substantial holdings in global equities, with a large proportion allocated to US stocks.

While some funds may be considering a “buy the dip” strategy, CFS is adopting a more cautious approach. Armitage clarified that the fund is not looking to immediately jump back into the market despite being a few percentage points underweight in its global equities portfolio, a position taken at the end of 2024 due to concerns about overvalued stocks.

However, CFS is in no rush to deploy capital in the immediate future. Following a trip to the US in March, Armitage observed that many businesses are grappling with uncertainty and experiencing delays in government approvals for major projects.