Private equity remains important
Despite global market turmoil, Australian superannuation funds remain committed to investing in private equity, according to a study by the University of New South Wales (UNSW).
A survey of major super funds found that private equity commitments currently are and will remain about 6 per cent of total assets. The allocation level has grown from 4.5 per cent of total assets in 2005.
Diversification benefits were the main objective behind private equity investment said UNSW school of actuarial studies associate professor John Evans.
Respondents also indicated that they were moving away from US and Australian equities in favour of Asia and were looking for a 11.6 per cent nominal return from private equity investments (down from 16.5 per cent in 2005) and an outperformance of publicly listed equity of 3.4 per cent per annum.
Evans also found that super funds were reticent about the relative performance risk of equity investment along with the lack of transparency in the sector.
“In Australia, superannuation funds are a major source of capital for the development of the economy, with assets of about $1 trillion and growing rapidly,” Evans said.
Recommended for you
Global asset manager BlackRock has identified bringing private markets to the wealth channel as a key business area for the firm that could generate US$500 million in revenue in the future.
Flows into cash and fixed income ETFs soared in May, rising from $366 million in April to more than $1.3 billion, data from Betashares shows.
Quinbrook Infrastructure Partners has promoted its Australian head to the role of chief executive of the global investment manager.
UK-based fund manager Royal London Asset Management has appointed a Sydney-based head of regional sales as it embarks on a multiyear plan to expand its presence internationally.
