ASFA defends role of super funds in private markets

Mike Taylor

Managing Editor and Publisher

27 February 2025

Major superannuation funds lobby group, the Association of Superannuation Funds of Australia (ASFA), has defended the role of superannuation funds in private capital markets.

At the same time, ASFA has warned against overloading funds with regulation, making investment in private markets less attractive.

Commenting on an Australian Securities and Investments Commission (ASIC) deep dive into capital markets which specifically noted the role of superannuation funds, ASFA said “every single Australian with a superannuation account has benefited from the sophisticated approach that super has taken to exposure in private markets”.

Further, it said these private market investments had been delivering strong results for members, including double digit returns in 2024.

“Private markets are important for improving diversification within superannuation fund portfolios, thereby improving the reliability of long-term returns for members,” ASFA said.

“ASIC’s research shows how concentrated the listed equity markets have become, specifically for the US within global equity markets but also within Australia,” it said. “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 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.”