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Australia’s QIC banks on alternatives, likes private debt

QIC
By Hui Ching-hoo   
December 1, 2022

Queensland Investment Corp (QIC) is focusing on evolving its alternative investment strategy and sees private debt as a bright spot as interest rates rise.

QIC State Chief Investment Officer Allison Hill points out that the 31-year-old company, the investment arm of the government of Australia’s Queensland state, has a strong heritage in alternative investments.

“Real estate was a core capability upon QIC’s inception and private equity and infrastructure were other capabilities which were originally established for the benefit of the state [of Queensland] but like real estate, have since been extended commercially to other third-party clients,” she says in an interview with Asia Asset Management.

“Exposure to alternative asset classes with trend and momentum factors have benefitted from the rise in global yields and the downtrend in equity markets and in turn have contributed positively to overall portfolio performance during the recent market volatility,” she adds.

According to Hill, QIC’s alternative investment capabilities continue to evolve in line with desired portfolio allocation requirements and market supply and demand dynamics.

QIC launched private debt capability last year, a move that was “born from a desire to continue to diversify the asset class mix and overall portfolio risk factors for our government related clients”.

“Private debt is an asset class which is attractive in a rising interest rate environment given its predominantly floating rate nature, and we continue to reflect this in our strategic asset allocation,” Hill says.

QIC managed over A$90 billion (US$60.89 billion) as of September 2022 on behalf of government and third-party clients.