ASIC probes super funds’ capital markets influence

Mike Taylor

Managing Editor and Publisher

26 February 2025

The Australian Securities and Investments Commission (ASIC) has raised the growing dominance of superannuation funds in Australia’s economy and their influence on market in a new discussion paper examining opportunities and risks in public and private markets.

In releasing the discussion paper, ASIC chair, Joe Longo said the exercise was one of the most significant initiatives of the year for ASIC noting that one of the critical issues was whether there needed to be regulatory interventions.

Longo said ASIC is determined to achieve dual goals by ensuring Australia’s markets are attractive to companies and investors while protecting against risks.

The ASIC discussion paper noted that, in Australia, initial public offerings (IPOs) are at their lowest point in over decade with many companies choosing to stay private.

At the same time, the discussion paper noted that several significant Australian public companies have been taken private in recent years without commensurate new listings to replenish the public market.

It said the five largest take-private and private-to-private transactions had an aggregate acquisition value of $70.6 billion.

“Superannuation funds have been involved in several large take-private transactions. These include the acquisitions of Sydney Airport and AusNet Services. Large global private equity players have also contributed to delistings,” the discussion paper said.

“While history suggests Australia’s recent declines in the number of public companies are likely cyclical and that our listing settings have been attractive, the dynamics are changing due to global trends, the growth in private markets and the scale of superannuation funds,” it said.

“ASIC is concerned about the future of Australia’s public equity markets. Deterioration in the quality, diversity and depth of our markets would have significant adverse effects on the economy and its liquidity and on Australians’ financial participation in these accessible and transparent markets.”

ASIC’s discussion paper said there was a need to be thoughtful about the conclusions to be drawn for Australia’s capital markets based on global developments and to recognise domestic differences.

“The size of Australian superannuation funds influence our capital markets and will likely drive the further growth of private markets, embedding them into the structure of our economy. With superannuation now one of the most important assets in a working Australian’s life, it underpins Australians’ wealth,” it said.