Hostplus has devalued assets in its property and infrastructure portfolios by between 7.5% and 10% as a result of the adverse effect of the COVID-19 pandemic.
The A$44.6bn (€24.7bn) fund, which caters to younger Australians working in the hardest-hit sectors of hospitality, sports and tourism, has A$4.4bn of its assets in infrastructure and A$5.4bn in real estate.
Hostplus said in a statement that while the full macro-economic impact of COVID-19 would not be fully understood for some time, it was clear that certain infrastructure and property assets such as airports, toll roads, and shopping centres had been materially affected by the current crisis.
As a result, and taken as a broad category of assets, Hostplus’ unlisted investments would “expectantly and realistically” experience lower valuations in the current climate than a few short months ago, it said.
”With this in mind, we have worked closely with our investment managers and asset consultant to determine appropriate impacts on the valuations of these unlisted assets so as to ensure that these assets are measured and appropriate for the current circumstances.”
“This, in turn, ensures that our investment unit prices appropriately reflect these circumstances in the best interests of all members and investors.”
As such, Hostplus has devalued assets within its property and infrastructure portfolios by a range of 7.5%-10%, depending on the individual investment and the age of its most recent independent valuation.
In a similar vein, Hostplus’ private equity and venture capital investments have also been devalued, for similar considerations and prudence, by 15% on average.
However, the current decreases in the valuations of Hostplus’ unlisted asset investments are, based on analysis, less extreme compared to the current heightened volatility being experienced in listed markets, it said.
Last month, AustralianSuper and global fund manager IFM Investors each downgraded some assets following a revaluation.
The Australian government paved the way for super fund members to draw down A$20,000 in two tranches to cope with financial crisis due to unemployment brought on by the pandemic.
Hostplus chief executive David Elia, said: “As at April we have A$6bn in cash (13.5%) and A$2bn in bonds/fixed interest (4.2%) and a further $22bn (45%) in listed (liquid) stocks. The fund had assets under management of A$44bn.
“This is more than enough to meet any demand arising from the Government’s early release scheme,” said Elia.