Every single Australian with a superannuation account has benefitted from the sophisticated approach that super has taken to exposure in private markets. These investments have been delivering strong results for members, including double digit returns in 2024.
As the umbrella peak-body for Australia’s superannuation sector, ASFA will work with our members on a comprehensive response to the areas that ASIC has enquired on.
We look forward to the continued discussion on this important set of asset classes, which is incredibly diverse. Private capital includes unlisted property investment like housing: crucial to boosting the supply of houses for people to live in. It includes infrastructure like roads, airports and hospitals. It can also include private equity investments such as those in life sciences, catalysing innovation in disease and virus management. Of particular interest in this report is private credit, a relatively small sector for super fund investment, but nonetheless an important source of credit to fund Australian businesses.
Private markets are important for improving diversification within superannuation fund portfolios, thereby improving the reliability of long-term returns for members. ASIC’s research shows how concentrated the listed equity markets have become, specifically for the US within global equity markets but also within Australia. Any increase in regulatory burden by ASIC (or more broadly) could disincentivise superannuation funds from diversifying out of listed markets which has the potential to impact members’ retirement funds.
The exposure to private markets has been a great driver of returns for Australians. It is important to remember super funds have delivered typical returns of at least 10.5 per cent for 2024, which is real money in real accounts for real people retiring.
ASIC’s media commentary this morning suggests that their areas of interest are primarily areas that APRA has done extensive work on over a number of years including liquidity, governance, valuations and system resilience. We encourage the regulators to work with one another to avoid any possible duplication of effort by the funds and we will draw this out in our comprehensive response.
Strengthening practices is important, but every minute the super funds spend responding to duplicative regulatory requests is a minute they cannot spend servicing members and building members’ retirement funds.
Mary Delahunty
ASFA CEO
For further information, please contact:
ASFA Media Manager Richard Garfield, 0451 949 300.
About the Association of Superannuation Funds of Australia (ASFA)
ASFA, the voice of super, has been operating since 1962 and is the peak policy, research and advocacy body for Australia’s superannuation industry. ASFA represents the APRA regulated superannuation industry with over 100 organisations as members from corporate, industry, retail and public sector funds, and service providers. We develop policy positions through collaboration with our diverse membership base and use our deep technical expertise and research capabilities to assist in advancing outcomes for Australians.
We unite the superannuation community, supporting our members with research, advocacy, education and collaboration to help Australians enjoy a dignified retirement. We promote effective practice and advocate for efficiency, sustainability and trust in our world-class retirement income system.
