PERSPECTIVES FROM
2025 PPI AUSTRALIA
Executive Seminar in Brisbane • October 19-21, 2025
Asia Pacific Roundtable in Sydney • October 22-24, 2025
The Pacific Pension & Investment Institute (PPI) gathered its global members for a week of events in Australia from October 19 to 24, 2025. The Executive Seminar in Brisbane (October 19-21) focused on key developments affecting Australia’s economy and policies. This was followed by the Asia Pacific Roundtable in Sydney (October 22-24), which discussed the region’s priorities and partnerships in response to political, economic, and demographic changes.
Executive Seminar: Australia at a
Strategic Crossroads
Demographic Trends, Election Dynamics, and Policy Priorities
Migration, education, and urbanization have significantly transformed Australia’s social and political landscapes. Migration has remained a core aspect since Federation, with about 30 percent of Australians born overseas. Major waves of immigrants from Europe, China, and India have led to a reality where half of Sydney’s and Melbourne’s voters are first- or second-generation migrants. Alongside migration, education has also reshaped the electorate. Today, roughly 40 percent of working-age Australians under 40 (nearly half of whom are women) hold a university degree. This has fostered a knowledge-driven, gentrifying economy that prioritizes evidence-based policymaking, climate action, and social inclusion.
Australia’s mandatory voting system compels parties to target the center rather than mobilize narrow ideological groups. Urbanization amplifies these effects, as more than 85 percent of Australians reside in cities. The country’s political future depends on whether parties can adapt to an urban, educated, multicultural electorate that values pragmatism and inclusion over strict ideology.
The newly elected Australian government has a valuable chance to plan policies over multiple years, enabling policymakers to look beyond short-term election cycles and pursue consistent, long-term reforms. Key initiatives in aged care, housing, taxation, and emissions reduction—areas that directly impact intergenerational fairness and social unity—are expected to become primary focus points. For example, aged care reform aims to balance affordability with sustainability, while housing policies work to improve accessibility and bridge generational gaps. Tax changes, including adjustments to superannuation and concessional earnings, are intended to promote a fairer distribution of economic responsibilities. Emissions goals reflect a realistic yet ambitious approach to environmental accountability. Simultaneously, the government might also pursue wide-ranging economic reforms by implementing measures to boost productivity, simplify regulations, and improve public sector efficiency, all while responsibly utilizing artificial intelligence.
Australia’s relationship with the United States reflects a complex mix of historical loyalty, strategic pragmatism, and adaptive caution amid shifting global dynamics. The alliance, rooted in over 85 years of diplomatic and defense cooperation, has evolved from post-WWII dependence on the U.S. to a multifaceted partnership encompassing economic, technological, and cultural ties. Yet, Australia faces challenges as U.S. attention fragments due to domestic political volatility, nationalist policies, and reduced engagement in the Indo-Pacific. As “the friend who doesn’t always get the call back,” Canberra is now forced to adjust its foreign policy toward Washington, D.C., reflecting “cautious pragmatism” and “strategic patience.” Issues such as regional power balances with China, the implementation of AUKUS, and defense spending highlight the tension between alliance loyalty and the need for autonomous capabilities. Looking ahead, Australia must navigate a volatile Indo-Pacific through selective engagement, innovation-driven economic transition, and recalibrated defense strategies.
Resource Extraction, Energy Transition, and Nature-Based Assets
Australia’s mining sector remains a key part of its economy, generating over half of corporate tax revenue and offering some of the country’s highest wages—averaging over 160,000 AUD annually, especially in remote fly-in, fly-out roles. Contrary to outdated stereotypes, modern mining is a highly technical, innovation-driven industry where Australia leads globally in safety and automation, using technologies such as driver fatigue monitoring and remotely operated autonomous systems. Collaboration with Canada underscores their shared dedication to sustainable mining practices, including progressive site rehabilitation and environmental stewardship.
While Australia’s resource extraction industries remain focused on iron ore, coal, and energy exports with limited domestic value addition, strategic partnerships—such as those with Malaysia for low-cost mineral processing—highlight efforts to boost competitiveness. Meanwhile, rare earth elements, which are vital to high-tech, defense, and electrification sectors, have become a key point of geopolitical and industrial rivalry, with Australia, the U.S., and Western allies working to challenge China’s long-standing dominance in the separation and processing of rare earths. Australian companies are playing a crucial role in reshaping global supply chains for these “vitamins for industries,” positioning Australia as one of the few alternatives to China.
Queensland’s changing energy and political scene shows a practical shift towards balancing economic growth, energy security, and environmental care. The state’s new energy roadmap focuses on financial integrity and a gradual transition, with adjusted timelines for closing old assets and increasing investment in gas as a bridge fuel alongside renewables. The government aims to encourage strong private-sector involvement in energy and infrastructure investment, supporting its commitment to economic openness and avoiding tax hikes. Once known as the “sunshine state,” Queensland is now repositioning itself as a forward-thinking energy hub aiming for net zero by 2050.
The global carbon market is quickly changing, with established compliance markets and new voluntary markets fueling investment in carbon sequestration, biodiversity, and ecosystem services. Australia plays a vital role through carbon farming in Queensland and New South Wales, where pastoral farms can store significant amounts of carbon dioxide over many years. Infrastructure, traditionally including water, energy, and transportation, is now expanding to cover ecosystem services, showing the growing societal and investment importance of natural capital.
Market-based solutions, including carbon dioxide removal, biodiversity credits, and renewable energy offsets, are increasingly being implemented to tackle climate-related resource limitations and urban resilience issues. Globally, compliance markets in Singapore, Japan, and the U.S. connect with voluntary corporate demand from companies like Microsoft. Biodiversity markets are progressing, shifting from voluntary to compliance systems, and are more often linked to profitable land restoration and adaptation credit programs.
These trends highlight the link between carbon, energy, and ecosystem infrastructure, where financial innovation, regulations, and technological advances work together to support climate mitigation, community resilience, and nature-positive investment strategies globally.
Booming Infrastructure and Real Estate Developments
Driven by population growth from other parts of Australia and preparations for the 2032 Olympics, Queensland is heavily investing in transportation and regional infrastructure. For example, the Cross River Rail Precincts stand as one of Australia’s largest urban renewal projects, transforming Brisbane’s inner city above the new underground rail network into world-class, mixed-use areas that maximize the value of the Queensland Government’s multi-billion-dollar investment.
Key precincts include the Boggo Road Innovation Precinct, a hub for health, education, translational biomedical, and environmental sciences, with a strong record of scientific breakthroughs and commercial success; 101 Albert Street, a landmark commercial tower connecting Brisbane’s midtown and central business district with next-generation office, retail, and public spaces; and the Roma Street Precinct, which will transform Brisbane’s historic transport hub into a vibrant gateway featuring residential, entertainment, hotel, education, and technology spaces, creating a memorable arrival experience. Together, these precincts align with Brisbane’s 2032 Olympic plans and set a new standard for urban renewal, innovation, and sustainable city living.
The Australian real estate market has become a sophisticated, transparent, and highly liquid market, especially in Sydney and Brisbane, with diverse pools of capital and strong investor activity across industrial, logistics, retail, office, and residential sectors. While housing remains a major store of wealth, vulnerable to interest rates and intergenerational wealth transfer, sectors such as industrial logistics, student housing, and the living sector are emerging as institutionalized investment opportunities, supported by private credit growth and evolving funding models beyond traditional banks.
Construction challenges, labor shortages, and planning delays in cities like Brisbane, Sydney, and Melbourne affect supply, while government policies and local planning authorities influence affordability and development results. Office and retail markets experience volatility and changing demand patterns, with decentralization, work-from-home trends, and urban infrastructure projects altering traffic flows. Sources of capital are shifting toward private equity and offshore investors, who seek income stability and long-term value in a market that is gradually becoming more institutionalized, attracting capital inflows and experiencing sector-specific growth in industrial logistics, aged care, and student housing.
Asia Pacific Roundtable: Priorities and Partnerships in a Region Reshaped
Retirement System Designs
Australia’s retirement system rests on three pillars: a universal age pension, earnings-linked mandatory superannuation, and voluntary savings. The superannuation guarantee, introduced in the early 1990s at a modest 3 percent, has increased to 12 percent, transforming the country's financial landscape and making retirement savings a key part of wage negotiations. Instead of emerging from abstract policy, the system developed from the practical needs of workers, unions, and employers seeking secure retirement outcomes, aligning with Australia’s broader social democratic traditions. This integration of progressive wage, tax, and savings policies effectively turned nearly every working Australian into an asset owner, redistributing wealth from the top 10 percent to the bottom 90 percent.
Today, the system manages over 4 trillion AUD in assets, expected to reach 13 trillion AUD by 2048. Australian funds have secured strong, long-term returns and have become key global investors in infrastructure, real estate, and private markets. However, the performance test regime designed to identify underperforming funds can unintentionally promote risk-averse, benchmark-tracking strategies, which may restrict capital flow into higher-impact or emerging sectors.
The system remains in the accumulation phase, with the full effects of the 12 percent contribution rate expected to materialize over the next 30 years. The next challenge is “decumulation”—helping members responsibly convert their balances into dependable retirement incomes. Future reforms will need to enhance board and trustee capabilities, refine the performance-test framework to reward long-term value creation, and find the right balance between insourcing and outsourcing fund management and service delivery.
Malaysia’s Employees Provident Fund (EPF), established in 1951, is the country’s oldest and largest mandatory retirement savings plan, serving 16 million members with approximately 240 billion USD in assets. As a government-affiliated statutory body, the EPF maintains significant operational independence in hiring, firing, and compensation decisions, earning widespread public trust through its high-quality service and focus on member experience. Its defined-contribution system requires 23 percent of wages (11 percent from the employee plus 12 percent from the employer), while also offering voluntary contributions, flexible withdrawal options, and, more recently, inclusive participation for non-Malaysian foreign workers.
EPF’s investments have shifted from being almost entirely domestic to a mix of 60 percent Malaysia and 40 percent global. Due to its size, portfolio changes are carefully managed to prevent market disruption. EPF also aligns its investments with national development goals, including major infrastructure projects like acquiring Kuala Lumpur International Airport, while fostering local asset management growth and cautiously exploring private market strategies.
Saudi Arabia’s rapidly changing demographic profile presents growing fiscal and social challenges for the General Organization for Social Insurance (GOSI). Its defined-benefit plan, which offers early retirement after 25 years of service, has become unsustainable despite a 400 billion USD asset base. A phased reform starting in 2020 has gradually shifted new entrants toward a defined-contribution model with auto-enrollment and increasing contributions, balancing financial sustainability with social acceptance. GOSI’s investment arm, Hassana, manages its sovereign-scale portfolio across global equities, fixed income, and alternative investments, while increasing domestic allocations to infrastructure, housing, and human capital projects aligned with the Kingdom’s Vision 2030. Alongside these financial changes, GOSI is testing complementary social programs, such as housing-savings plans and unemployment-support schemes, to support future retirees and redefine the evolving social contract.
The Government Pension Investment Fund (GPIF) of Japan manages a unified portfolio worth approximately 1.8 trillion USD—the world’s largest public pension fund—under a pay-as-you-go system designed to balance the needs of current retirees with the sustainability of future generations. GPIF allocates about 20 to 25 percent to domestic and foreign bonds and equities, with a 5 percent cap for alternatives, including infrastructure, real estate, and private equity. Aiming for a real return of 1.9 percent above wage growth, it enforces strict tracking-error limits and regularly rebalances its portfolio through in-house trading and derivatives to minimize market disruption.
Long-term stress testing confirms that GPIF’s disciplined adherence to its asset allocation yields stable returns with a high probability of meeting reserve objectives, even during crises. While the fund monitors concentration risk, especially regarding its exposure to U.S. equities, it avoids currency hedging by incorporating foreign exchange assumptions directly into its strategic model. GPIF leverages its scale to promote sustainable market practices through ESG engagement and stewardship. GPIF is responsible for contributing to the stability of the national pension system by ensuring the long-term investment returns it needs. The fund’s investment returns are used to cover future pension payment deficits, which are expected to increase due to a decline in Japan’s working-age population.
Institutional co-investment opportunities in Indonesia are focused on sectors aligned with the country’s long-term development priorities. These include digital infrastructure, green and blue energy, healthcare, transportation, logistics, and food and agriculture. In digital infrastructure, efforts such as expanding nationwide broadband, building data centers, and developing telecommunications towers aim to improve connectivity and support the country’s rapidly growing digital economy. Green and blue energy investments emphasize renewable energy sources like geothermal, solar, and sustainable marine resources to accelerate Indonesia’s energy transition while promoting environmental sustainability. Transportation and logistics initiatives involve developing ports, railways, and integrated supply chains to boost trade efficiency and regional connectivity. Food and agriculture opportunities target scalable projects in agribusiness, processing, and sustainable farming to meet domestic demand and enhance export growth. These initiatives present attractive co-investment prospects for overseas institutional investors, offering the opportunity to deploy capital alongside local and government-backed entities in projects that deliver both financial returns and long-term national development impacts.
Country/Region Spotlights
The Hong Kong Stock Exchange has re-emerged as the top global IPO venue in 2025, raising 24 billion USD year-to-date—5 billion USD more than the New York Stock Exchange and 1 billion USD ahead of Nasdaq. Activity has been driven by blockbuster deals like CATL’s 5 billion USD raise and smaller offerings across various sectors, including biotech, AI, robotics, and new consumer brands such as Pop Mart (the maker of the Labubu doll). Investor participation has been widespread and international, involving long-only investors, private equity, hedge funds, sovereign wealth funds, and high-quality institutions from North America, Europe, and the Middle East. These IPOs have performed strongly in the aftermarket, with an average one-day gain of 25 percent and a one-month gain of 29 percent, with larger deals outperforming even further.
The strong momentum in the primary market aligns with the Hang Seng Index’s 30 percent increase this year, driven by attractive valuations (Chinese tech stocks have been trading at low-teens P/E ratios, compared to 30x for their U.S. counterparts), policy support, liquidity, southbound flows, and global investor interest. For asset allocators and private equity-focused institutional investors, this environment makes exits via IPO or trade sales into publicly listed peers easier. Recent quarters have already seen significant distributions from China-focused PE funds, benefiting from higher IPO volumes and trading liquidity. Looking forward, Hong Kong’s IPO pipeline exceeds 280 filings, with potential proceeds of over 25 billion USD, emphasizing its vital role in fostering growth, liquidity, and exit opportunities.
The Republic of Korea’s economic landscape presents a paradox: the country excels in high-tech innovation and global ambition, yet faces deep structural issues, political uncertainties, and worries over democratic backsliding amid controversial declarations of martial law. Economic challenges, such as persistently high household debt, weak domestic demand, and the world’s lowest fertility rate (0.72), coexist with strong corporate performance, a resilient banking sector, and world-class advanced manufacturing. The Korea Composite Stock Price Index (KOSPI) is also near record highs. The National Pension Service (NPS), with assets of almost 1 trillion USD, historically operated an overly generous defined benefit scheme with low contribution rates and early retirement options, risking depletion of its reserves. Recently, reforms increased contributions, introduced a defined contribution system with auto-enrollment, and shifted from a bond-heavy investment portfolio to a diversified “reference portfolio” model—increasing shares, alternatives, and overseas investments.
The Pacific Islands, an archipelago of roughly 1,500 islands spanning an area comparable to that of France, are home to only about 2 million people (mostly Polynesian and Melanesian communities). They sit atop extensive marine mineral reserves and rich fisheries. Despite their abundant natural resources, Pacific Island nations face significant challenges, including limited infrastructure, a brain drain to Australia and New Zealand, and outdated legal systems. Their pension and sovereign wealth funds remain small, fragmented, and constrained by limited data, customary land ownership, and weak banking institutions. Climate change amplifies their vulnerabilities through rising seas, stronger storms, and fragile ecosystems, prompting an urgent push for “blue-economy” innovations such as seabed mining, seaweed-based bioenergy, reef restoration, and ocean-bond financing to convert environmental risks into investment opportunities.
Regional catastrophe and resilience funds, along with blended-finance mechanisms, are emerging to attract global capital for climate adaptation and ocean-based growth. However, progress hinges on harmonizing tax and treaty frameworks, respecting land protocols, and deploying sovereign-backed “first-loss” capital to catalyze blue bond markets. Unlocking the region’s full blue economy potential will require stronger regional coordination, the development of sovereign funds, and ongoing investment in human and institutional capacity.
Industrial Policies x Artificial Intelligence
Driven by the rapid growth in demand for artificial intelligence and high-performance computing, modern data centers are being built on an unprecedented scale, with campus-style facilities often exceeding hundreds of megawatts of power capacity to support GPU and AI-heavy workloads. These projects increasingly use advanced liquid and closed-loop cooling technologies to handle the high heat density from AI hardware, while also reducing water consumption and environmental impact. Incorporating renewable energy and achieving carbon-neutral designs are now standard requirements, as clients and governments alike prioritize sustainability alongside performance.
Geographically, developers are strategically placing facilities in regions with reliable, low-carbon energy, supportive regulations, and available land, often aligning with national industrial policies focused on digital sovereignty and critical infrastructure protection. Security, resilience, and compliance with government standards, especially for sensitive or classified workloads, are now key design considerations, including accreditation for secret operations and strict ownership controls. Additionally, data centers are adapting to support hybrid and multi-cloud architectures, providing connectivity solutions that enable flexible scaling for enterprise and government AI applications.
Overall, the industry is moving from incremental expansions toward purpose-built, mega-scale campuses that integrate advanced computing, energy efficiency, and regulatory compliance. These centers illustrate how technological needs and government policies shape the development of next-generation infrastructure.
The Asia-Pacific Region: Outlook and Opportunities
Data has become the new global commodity, driving significant investment flows and fueling the growing energy needs of AI and technological integration. In private equity, data use has become key to creating value, supported by global teams that combine technical expertise with local knowledge. Flexibility is crucial amid geopolitical shifts and technological changes, and diversifying across asset classes is vital to capture sustainable growth in the diverse markets of the Asia Pacific, including developed economies such as Australia and New Zealand, as well as emerging markets like Indonesia, Vietnam, Malaysia, and Thailand.
Investment approaches balance public and private markets by leveraging private market duration and yields while understanding country-specific dynamics and regulatory complexities. Successful partnerships built on trust, alignment, and shared goals are essential for navigating fragmented markets like India, where local execution and founder readiness determine success. Large-scale thematic investing, focusing on decarbonization, deglobalization, digitalization, and AI-driven change, supports multi-trillion-dollar trends, demanding partnerships that combine capital with operational expertise.
In Australia and New Zealand, stable governance and resilient legal systems support digital transformation, online marketplace investments, and the acquisition of leading businesses. Throughout Southeast Asia, country-specific strategies are vital, focusing on non-cyclical, long-term sectors while leveraging strengths in logistics, infrastructure, and manufacturing. Ultimately, the Asia-Pacific region’s diverse economic landscape offers numerous investment opportunities, with AI, digitalization, and sustainability as key drivers for long-term value creation and business transformation.
Allocators highlighted the implications of changing population dynamics on social systems, as well as the role of automation, robotics, and AI in managing aging populations and increasing energy demand. Investment strategies were examined across multiple areas, including risk-based portfolio management, conservative and long-term approaches in mature markets, allocations to equities, gold, and real estate, along with cautious views on cryptocurrencies. Emerging markets were seen as opportunities due to demographic growth and strategic diversification, while developed markets faced challenges from high valuations and inflation.
Key themes included thematic and bottom-up investing, AI-driven market concentration, and the integration of technology in financial decision-making. U.S. public pensions stressed the importance of simplicity, transparency, and cost-effective fund management, considering their legislative and resource limitations, while European investors questioned the idea of long-termism. Discussions also covered geopolitical and macroeconomic risks, countercyclical investment strategies, energy transition approaches, and the use of stablecoins and AI-enhanced analytics.