The $28 billion AustralianSuper will hold all inflows in cash until “;the market picture becomes clearer”;, chief executive Ian Silk told a gathering of participating employers last week.
Silk said AustralianSuper’s trustees had made no major asset allocation changes at their investment meeting the week before, and would not until a longer-term bear or bull market trend became apparent. There was no need for undue alarm at a loss of 0.8 per cent for the default balanced option in July, he added. “;We hate to lose money at any time, but this latest bout of volatility has to be put into perspective,”; he said. “;I was listening to the news on the radio after a couple of the big one-day falls, and the announcer said the market had not been so low since…and I was waiting for The Great Depression, World War 2…and he continued, January. All that hype and we’d only lost the gains of 2007.”; Silk said AustralianSuper’s direct exposure to the sub-prime mortgage malaise was a $2.3 million investment in a Basis capital fund via a hedge fund-of-funds. “;That’s equal to about one fifteen-thousandth of our assets, so without being blaise, it’s not going to bother us too much either way.”; Silk said it was too early to tell what effect a tighter credit environment might have on AustralianSuper’s overweight allocation to unlisted assets, including private equity. Meanwhile, AustralianSuper will introduce a market-linked pension from January 1, 2008, responding to what chief executive Ian Silk called “;our biggest demand”; from members.
The brunt of losses from the LA wildfires are expected to be borne by primary insurers and high-risk reinsurance programs, but super funds are nevertheless closely monitoring the possible impact of the fires on catastrophe bond and insurance-linked securities exposures.
Simon HoyleJanuary 17, 2025
