Australian (ASX) Stock Market Forum

Superannuation, the ultimate government cash cow?

Just a bit more on the Australian Super loss, from the AFR daily email.


💬 “Private credit is the junk bond of 2024 … They went nuts at zero interest rates, chasing yield. Now that rates have risen, and the economy has softened, plenty of companies are in trouble and need to be written down,” said one major venture capital investor, speaking on condition of anonymity to avoid jeopardising their relationship with AustralianSuper.
Great just what we need.
Another debacle like the junk bond debacle.
Mick
 
I think we need a specific thread on the role of Private Equity , because its very relevant to manufactured returns that big super seem so proud of (and called a cancer by many).

wrt
this AustSuper mess. from AFR :

"AustralianSuper making those sorts of bets; that’s what’s required to try to make 10 per cent a year for members, the number every chief investment officer has to endeavour to beat every year. However, it is about balance and realising the risks.

""AustralianSuper’s private equity boss Mark Hargraves said the asset class was the fund’s top-performing in the past decade, making 12 per cent a year for members. He blamed Pluralsight’s demise on “the combination of deteriorating sales revenue from US corporates due to cost-cutting and the increase in debt service costs due to higher interest rates led to a sharp deterioration in the company’s trading performance triggering a restructure
”.

... and here we are. PE doesn't price daily, and to me it's fake returns. All those unlisted assets look great , until they're not. And all those brag adverts, just based on hot air.
Nailed it.
 
Just a bit more on the Australian Super loss, from the AFR daily email.


💬 “Private credit is the junk bond of 2024 … They went nuts at zero interest rates, chasing yield. Now that rates have risen, and the economy has softened, plenty of companies are in trouble and need to be written down,” said one major venture capital investor, speaking on condition of anonymity to avoid jeopardising their relationship with AustralianSuper.

Great just what we need.
Another debacle like the junk bond debacle.
Mick
i have been watching that trend , and wondering how liquid they were ( and the actual risk rating )

i remember reading about private trusts buying into real estate , and how that went wrong in the GFC

but yes , just when you think lessons were learned in the GFC , you find out some did NOT learn ( and in fact quadrupled down , expecting to be thrown a life-line )
 
i have been watching that trend , and wondering how liquid they were ( and the actual risk rating )

i remember reading about private trusts buying into real estate , and how that went wrong in the GFC

but yes , just when you think lessons were learned in the GFC , you find out some did NOT learn ( and in fact quadrupled down , expecting to be thrown a life-line )
Go back even further to the 1987 crash and unlisted property trusts.

The super funds are a quasi Govt slush fund IMO, it is in the best interest of the Govt and the members that the funds provide for a better retirement, which is a broad statement.

Does better retirement mean more social housing and clean energy?
To some yes, to others probably not.
 
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I wonder what it is as a proportion of total funds of AS? Probably not high but nevertheless some contrition on behalf of AS members would be nice but it seems that is not the done thing in these modern times.

If a Trustee of a SMSF rode an investment into the ground and lost $5k rather than getting out at $2.5k a quisical eye would be cast upon them but not so with these big buggers. That's my view for what it's worth which isn't much.
I did the check when i got the news first: 330 billions under management but some of it in cash and some holders like me handle own choices and do not access these options
I believe these 1.1b will end a sizeable amount of the specific funds affected
 
So millions to pay dearly for buying inflated price assets with not control.
I am a member, but luckily managed 90% of the funds directly
It wont matter, a new batch of money coming in next payday and a new group of members being born or getting off a plane every day.
Lol a never ending supply of money, it can't go wrong, can it?
 
from a Morningstar report:

The country’s two largest superannuation funds, AustralianSuper and Australian Retirement Trust, are pulling away from the rivals and now account for more than half of all new retirement savings and more than $655 billion in assets.

That compares to $700 billion overseen by their five largest industry super fund rivals – UniSuper, Hostplus, Cbus, Rest and HESTA – a gulf that has grown over the decade.
.
MySuper products had an aggregate $976 million in assets, spread across 61 MySuper products. ..And SMSFs combined hold almost as much
 
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