Australia’s largest industry superannuation fund has cut the value of its A$30bn (€16.5bn) unlisted real assets by 7.5% as a result of the market uncertainty caused by the COVID-19 pandemic.
The $180bn AustralianSuper became the first industry super fund to devalue its unlisted real estate, toll roads, airport and infrastructure assets.
Ian Silk, AustralianSuper’s chief executive, said: “In the current unique circumstances, AustralianSuper has moved to revalue its unlisted assets so that members can have an up-to-date picture of their superannuation balances.
“Assets in the AustralianSuper portfolio are held at their ‘fair value’ with regular independent valuations undertaken to maintain equity between members at all times.”
Silk said the values of all investment portfolios had been adjusted to reflect the economic and financial market impacts of COVID-19.
Silk said the valuations reflected all the available information at the current time.
But he urged members not to take any action and that the fund would continue to constantly monitor the outlook and ensure valuations remain fair.
Aside from property and infrastructure, IPE Real Assets understands AustralianSuper has also cut the value of all unlisted assets, which includes private equity and corporate debt.
A source said: “Whilst unlisted assets do not get priced daily on the share market, they are regularly valued by the fund in accordance with the fund’s valuation standard. Underpinning this approach is the use of independent valuations, with over 90% of our directly owned unlisted assets typically valued by an independent valuer on a quarterly basis.”
The revaluation move has come hours after the Australian government made the unprecedented move to allow members of super funds to draw down up to $20,000 worth of savings over two years to help tide them financial hardship as a result of the pandemic and the resultant loss of jobs.
Industry sources said that if there were rush from members to withdraw money it could trigger a squeeze on liquidity, in spite of continuing contribution inflows.
Other funds in Australia’s A$3trn superannuation industry are currently reviewing the value of their unlisted assets.