The world is your oyster: How this global private equity fund stands out from the pack

When you were young (or at least young at heart), you may have heard the phrase "the world is your oyster". And while the phrase most often applies to young people who are ready to take on life's great adventures, the saying could probably also apply to investing. There is a whole world of investment opportunities out there and sometimes, the best ones are not found in your own backyard.

This is certainly the case for the MLC Global Private Equity Fund and portfolio manager David Chan. In our latest Expert Insights discussion, he revealed that the fund has only 10% allocated to Australia. But that doesn't mean he worries about losing out on opportunities here at home. In fact, he argues having natural exposure to offshore ideas is actually a necessary part of any portfolio.

"In today's environment in particular, having some assets offshore also helps mitigate some of those risks from a portfolio perspective."

In this brand new edition of Expert Insights, David shares his thoughts on why going global is a good thing. Plus, we'll delve into the one thing that makes David and his team stand out from the rest of the pack - their focus is not on the large end of town.

EDITED TRANSCRIPT

LW: Tell us about the allocations to different regions in the fund.
David Chan: For MLC, we roughly have 40% of our portfolio in the US, 30% in Europe, and 30% in Asia Pacific. I think it's a very global programme and it's always been designed that way, about half our team is based in New York. And the reason for that is that when we look at the opportunity set for investments, most of it is outside of Australia, and so we want to be able to access that global opportunity.

LW: Why is only 10% of the fund allocated to Australia?
David Chan: We've never had more than 10% of our programme invested in Australia, and the reason is that actually when you look at the investment universe, most Australian investors have their portfolios flipped the other way around, they have 90% of their assets in Australia and 10% offshore. But the growing opportunity set offshore means that they've actually missed out on a large leg of the growth. 

And I think in today's environment in particular with different macroeconomic risks and rising inflation and currency risks as well, having some assets offshore also helps mitigate some of those risks from a portfolio perspective.