Industry superannuation fund Asset Super has invested $12 million in the global private equity market.

The investment is targeted at the secondaries market, investing in the LGT Crown Global Secondaries II Fund, which is managed by Ireland-based firm LGT Fund Managers.

Investing in the secondary private equity market was part of Asset Super's strategy to avoid the J-curve effect in private equity, Asset Super chief executive John Paul said.

The J-curve effect in private equity happens when valuations in a private equity portfolio decline relative to the investment the investor has contributed.

"By investing in the secondary private equity market, the investment decision seeks to improve returns by avoiding the J-curve cost normally associated with private equity investments," Paul said.

"Asset Super classifies this investment as an alternative growth investment."

It is the first investment in the fund for Asset Super.

In late 2009, Asset Super made the decision to commit $50 million to the LGT fund following advice from its asset consultant, Mercer.

The investment focus for the fund was to invest in secondary partnership investments throughout all private equity investment stages and without geographical restriction, Paul said.

The fund has invested in 11 secondary transactions and has direct investments in 25 private equity partnerships, as well as a number of large indirect investments through portfolio holdings.