Lyndon: Hello and welcome to Know your assets, the series where we introduce you to some of the things that we invest in here at UniSuper. My name is Lyndon and with me in the studio today is Penny Heard, she's the Head of Australian Equities in the Investments team. Penny, welcome, thank you for being here.
Penny: Thanks very much, Lyndon.
Lyndon: So you're part of the investments leadership team. What does your role involve day to day, Penny?
Penny: I'm Head of Australian Equities and myself and the team, we invest UniSuper’s assets into the Australian listed market. When we look at investments, obviously the financials are important, but not only that, the management, the board composition and governance and any risks that might be associated. As a result, I think we're really attracted to quality companies with long and enduring cash flows that we think can continue to deliver great returns for members over the long term.
Lyndon: So within Australian equities—the companies and brands that we invest in, are there any particular ones that folks might be familiar with?
Penny: There are a number of household names that the members would know—for example Telstra, Woolworths, and what we're here to talk about today being Transurban.1
Lyndon: Yes. And speaking of Transurban, Penny, we actually went down to Transurban and met the team there and caught up with Michelle Jablko, the new CEO. In terms of the relationship between UniSuper and the Investments team and Transurban, how does that unfold? Who takes charge of that day to day?
Penny: Yeah, look, that's really spearheaded by Matthew Spence. But it's a significant investment for all of UniSuper, so we're very, very engaged.
Lyndon: Amazing. Alright, let's start with some key facts first about Transurban, a bit of a spotlight on the company. What do we need to know?
Penny: So Transurban sits within the Australian asset class. It's a large infrastructure company, and it owns and operates a number of toll roads, be it in Queensland, New South Wales, Victoria, and in North America. It's got a market capitalisation of around $41 billion2, so it's a significant company within the ASX, and UniSuper, we have around 11% holding3 in the company so it's a significant investment.
Lyndon: Alright. Well, with all that being said, let's get to know Transurban.
Michelle: We've got over 10 million customers who use our roads every day to get in and out of work, to go on holidays, get to the airport, to attend social events. And essentially what we do is we bring together the community need, the capital and the infrastructure to help those customers move around our cities efficiently, safely and sustainably.
All our board meetings, executive committee meetings, we start talking about safety. It's such a core part of our culture. We know when we build roads, we're also adding to sustainability. Just this year, we hit out 2030 Scope 1 and Scope 2 targets. So for 50% reductions, about seven years ahead of schedule. And that's through things like having renewable energy, having LED lighting through our tunnels.
If you're going to be here for a long time, you've got to be really mindful of the impact you're having.
Matthew: Here at UniSuper, we manage over 70% of our assets in-house. What does that mean? It basically enables us to deliver healthy returns to our members while keeping costs down. As a super fund, we're naturally drawn to what we call ‘fortress assets’. Fortress assets are unique. They’re hard to replicate, and they offer attractive and stable long-term returns. So Transurban really fits that profile for us.
Michelle: I think because we've got so many assets in so many markets, we're able to take what I call a long-term view. The West Gate Tunnel project, that's due to open in 2025. That will be really important for Melbourne. It's going to take 9,000 trucks a day off suburban streets. It's going to save people around 20 minutes during peak hour.
Further north in Sydney, we've just commenced construction on the widening of the M7. In Queensland, there are the Olympics coming in 2032. We're talking to government in Queensland about those.
Matthew: In terms of Transurban's ongoing growth, in Sydney they've got the WestConnex project and potentially over time, a second Harbour tunnel. In Brisbane they've potentially got the Logan and Gateway Motorway expansion projects.4
Penny: Beyond Australian shores. Transurban has a growing presence across North America.
Michelle: Our business is global, so we're in five markets, three on the east coast of Australia and two in North America. We've got a road in Montreal in Canada where, again, we're in discussions and planning for potential extensions.
Penny: At UniSuper, we know the value of great thinking.
Michelle: There's always a lot we're thinking about from an innovation perspective. So for example, pacemaker lighting, which really helps draw the driver along with the lighting. And then we're looking at new emerging technologies as well. So for example with a business out of Silicon Valley called Plus, essentially what we're doing is trialling automated freight. I’m really excited about the future.
Matthew: On the surface it looks like they're just building roads. But underneath that, there's a whole network of data. Transurban is constantly analysing and reviewing that data, looking for ways to improve efficiencies and to understand exactly what it is that their customers want and need.
Michelle: We've got strong population growth in the cities. If you say Sydney over the next 20 years is going to grow by 25%, Melbourne and Brisbane one and a half, two times that—we need to be a long-term trusted partner of all the people we work with, whether it's governments, the people that build our roads, and we need to continue to innovate.
Penny: As the company continues to grow and technology expands to allow for even greater insight, it's great to see Transurban's goal of a better-connected world becoming a reality. And as the company's largest investor, it's easy to see how UniSuper’s connection to Transurban will stay strong for years to come.
Lyndon: Wow, Penny, that has really brought Transurban to light in a whole new way for me.
Penny: It really has showcased the great opportunity Transurban represents in terms of an investment, but also the significant amount of work that UniSuper does in analysing and understanding the opportunity.
Lyndon: And Penny, if there are members out there who might be interested in their super having exposure to a company like Transurban, what are the investment options that feature the company?
Penny: Yes, members could look at some of the pre-mixed options that have the Australian equities exposure. Also more specifically the Australian Shares option. And for anyone in the Defined Benefit fund, they have a significant exposure to Transurban within that already.5
Lyndon: Amazing. Well, Penny, thank you so much for your time. Thank you for joining us and being here. And thank you to you also for joining us. Don't forget to join us next time when we take a look at another great UniSuper asset. We'll see you then.
The information in this video is general in nature and it doesn't take into account your financial situation, needs or objectives. Before making any decisions about your super, consider your circumstances, the relevant PDS and TMD on our website, and whether to seek financial advice. Comments on the companies we invest in aren't intended as a recommendation to include those companies in your own portfolio. Our portfolios have been designed to suit us, and they may not be appropriate for others. UniSuper takes no responsibility for comments made by Transurban. Investment returns aren't guaranteed, and past performance isn't a reliable indicator of future returns. Prepared by UniSuper Management Pty Ltd (ABN 91006 961799, AFSL No. 235907) on behalf of UniSuper Limited (ABN 54 006 027121) the trustee of UniSuper (ABN 91385 943 850, AFSL No. 492806) the fund.
1 These investments are current as at May 2024 and are subject to change. They’re not being recommended for inclusion in personal portfolios.
2 As at February 2024
3 As at August 2023
4 No assurance can be given that these potential opportunities will eventuate, or that Transurban will be able to participate in them. Transurban's ability to participate in any future projects or acquisitions will be subject to, among other things, applicable sales processes, applicable government processes and the receipt of relevant regulatory approvals.
5 As at May 2024. Consider the PDS and TMD on our website, and your situation, before making decisions. Before switching your super, consider the possible effects it could have on things like the fees you pay and the tax on your super. There could be other effects too, so it’s best to seek financial advice if you’re unsure.
