21.7% vs 4.5% – the industry fund unlisted asset edge
Unlisted assets continue to be the key performance differentiator between industry and retail funds, according to an analysis of the latest data from the Australian Taxation Office (ATO) and the Australian Prudential Regulation Authority (APRA).
The comparatively heavy exposure of industry and public sector funds to unlisted assets has been a feature for most of the last two decades and the latest analysis from WealthData confirms a continuation.
The latest data analysis comes against the background of the Australian Prudential Regulation Authority (APRA) reportedly placing pressure on superannuation funds to ensure their unlisted investments are appropriately regularly revalued.
The reports pointed to an APRA draft practice guide urging funds to “consider the potential impacts on beneficiaries of selling assets at a stale price”.
The analysis, undertaken by WealthData principal, Colin Williams shows that while unlisted assets making up 21.7% of industry fund allocations and 21.5% of public sector fund allocations, they represent just 4.5% of retail fund allocations.
The relatively large exposure to unlisted assets by industry funds has been criticised by some financial advisers who argue that they tend to disguise performance because they are not frequently marked to market.
Importantly retail funds outpaced industry funds in their recovery from the Global Financial Crisis (GFC) because of their heavy exposure to equities.
The WealthData analysis shows that, currently, retail funds exposure to equities stands at 58.1% of total allocations, compared to 51.5% for industry funds and 54.5% for public sector funds.
It would seem even APRA know the Industry Super Unlisted Asset valuations are fudged.
AustralianSuper last week admitted it’s over exposure in Unlisted property failed.
And of course APRA do nothing against Industry Super. Just like ASIC.
Regulatory Capture Corruption !!!
Perfectly stated. Corruption by regulators and terrifyingly, these funds led essentially by criminals just keep amalgamating and getting bigger, so the danger grows.
Agree it’s not incompetence it can only be put down to corruption.
This issue has been festering for years and I’m glad to see it getting attention.
There is, in my opinion, massive problems relating to equity here which need to be addressed immediately.
APRA are letting a Ponzi scheme happen right under their nose. The worst part of it all is that there is obviously no regulation set eg all fund managers must mark the value of the assets and when this needs to be done by. Didn’t Rest or Host just try and sell a commercial asset and were offered 100 million less then they wanted, I bet they still didn’t mark the value down.
Anyone else remember the industry fund called EPAS that went bankrupt in the 90’s that had basically all invested in ‘unlisted’ real estate assets?
Their members only ever received something like 16c in the $ after years of chasing the liquidators – unwelcome surprise to non-retirement!!