More than a dozen Canadian and Australian pension giants have signed a first-of-its-kind agreement to ramp up investment between the countries, home to two of the world’s largest retirement systems.

The initiative was announced in Sydney on Wednesday during

Prime Minister Mark Carney

’s visit to Australia. Under a memorandum of understanding — the first between the two systems — funds will cooperate to channel more pension capital into opportunities in both markets, according to a statement from eight of Australia’s largest pension funds.

Signatories include AustralianSuper, which manages A$410 billion, and the

Canada Pension Plan Investment Board

, with $781 billion in assets, along with eight other major Canadian funds.

Canada operates the world’s second-largest pension system, while Australia’s A$4.5 trillion pool is No. 4, according to the statement. Canada’s system is forecast to hit $8 trillion while Australia’s is projected to swell to A$11 trillion by 2040.

Carney’s government is seeking funding for large-scale infrastructure projects — including ports, rail and pipelines — as Canada looks to cushion its economy against

U.S. President Donald Trump

’s protectionist policies. The Canadian leader has toured the globe in recent months searching for capital to help fund those ambitions.

The new agreement is “underscoring support for ongoing cooperation between Canada and Australia in the interest of mutual value creation,” CPPIB said in a separate statement.

Australian funds, flush with inflows from mandatory retirement contributions set at the equivalent of 12 per cent of wages, are steadily increasing offshore investments. Roughly half of the country’s pension assets are invested abroad, a share that is expected to rise as managers pursue larger deals.

  • Pensions not a ‘plaything’ in domestic investment drive
  • Canadian pensions oversee US$1.2 trillion revamp to private equity

There is “fertile ground” for investment between Canada and Australia, the Australian funds’ statement said, and the agreement will facilitate dialogue with governments on policy barriers to improve the business environment for investment.

The memorandum of understanding will “unlock greater long term capital for private investment on behalf of millions of working and retired people,” it added.

Bloomberg.com