Unlisted assets slashed

AustralianSuper takes firm action on portfolio

THE nation’s biggest superannuation fund, AustralianSuper, has become the first out of the gates in cutting the value of its portfolio of unlisted assets.

AustralianSuper has cut the value of the portfolio, which includes toll roads, airports and other infrastructure, by 7.5 per cent, resulting in a 2.2 per cent hit to its main balanced option. It comes as the nation’s super funds stare down the threat of a squeeze on liquidity as the government allows sacked workers to access up to $20,000 worth of savings over two years, and as members rush to switch their money into safer assets such as cash options.

Each super fund across Australia is reviewing the value of their unlisted assets, generally done on a quarterly basis, in order for the private equity investments, property, ports, toll roads and airport holdings on their books to reflect their actual value.

About 90 per cent of AustralianSuper’s unlisted assets are valued by an independent valuer on a quarterly basis.

AustralianSuper, which had about $180 billion in funds under management before the coronavirus pandemic struck, has most of its members in the flagship $130 billion balanced option. “In the current unique circumstances, AustralianSuper has moved to revalue its unlisted assets so that members can have an up-to-date picture of their superannuation balances,” AustralianSuper chief Ian Silk said. “The values of all investment portfolios have been adjusted to reflect the economic and financial market impacts of COVID-19,” he said.

Unlisted assets are believed to make up about 20 per cent of AutralianSuper’s overall assets and include toll roads such as WestConnex, Port Kembla and Port Botany, electricity distributor Ausgrid, Brisbane Airport, Perth Airport and Vienna Airport. Such assets have delivered outsized returns over the past decade as investors were rewarded for holding “illiquid” assets that were difficult to sell out of at short notice. The $750 billion notfor-profit industry fund sector has derived a great deal of its outperformance, compared with the bank-run retail sector, thanks to its propensity to invest in unlisted assets.

The superannuation sector has welcomed moves to open up nest eggs for workers experiencing hardship, but industry lobby groups have expressed dismay they were not consulted on the plan.

The Australian