The start of US President Trump’s second term introduced significant volatility to the leveraged credit market. Executive orders, trade policies, and elevated interest rates collectively hindered deal flow. The current environment, while turbulent, presents opportunities for active investment managers to identify undervalued credits that offer attractive yields.
ASIC chair Joe Longo says that the corporate cop won’t rush to introduce more regulation into private markets but that he doesn’t want to be “picking up the pieces in three years’ time”. The comments come as ASIC also tightens its focus on delivery of member services, with Longo warning the regulator would pursue enforcement action in response to failure.
Super funds and other asset owners are better equipped to navigate the new private credit landscape than retail investors, but they still have a role to play in educating them amidst booming interest in the asset class.
Australia is not alone when it comes to trying to solve the issues that pension fund members face when they retire. An Investment Magazine roundtable, sponsored by T. Rowe Price, has heard that despite the perceived shortcomings of the Australian system’s retirement offerings, the local industry is highly regarded and is being closely watched by its global peers as it develops new products and services.
Australian asset owners are being forced to reconsider their massive exposures to US markets as political and economic upheaval roils the land of the free. But when it comes to investments, is there any meaningful alternative?
Despite the regulators’ insistence that funds get better at engaging with retiring and retired members, many super funds are stuck in the mindset that they are a product, not service provider. Nailing this transition will be biggest and most challenging task for many funds if they want to retain members as they head into the golden years.
The $330 billion Australian Retirement Trust has used its previously confidential submission to ASIC to warn against duplication of an already “comprehensive” private markets regulatory framework while calling out the rapidly growing evergreen fund sector as potentially requiring more oversight.
The Investment Magazine Fiduciary Investors Symposium heard that Australia needs about $500 billion of capital investment to facilitate the energy transition. But asset owners face the question of how to generate long-term resilient returns from an investment thematic that is increasingly politicised.
Rather than making advice through super a battleground issue, the focus should be on making it work well, write David Bell and Geoff Warren. Funds have the responsibility and are well-positioned to assist their members who would otherwise receive no advice as they approach and enter retirement.
Pension fund members in retirement want the sustainability of pension payments. OPTrust chief investment officer James Davis told the Top1000Funds Fiduciary Investors Symposium that he believes a total portfolio approach (TPA) is the best way to deliver that, and it’s been a journey towards delivering for the past 10 years.
For decades it seemed the most important thing super funds did was generate strong long-term returns. That emphasis is shifting as more members move into retirement, and as they generally take up a broader range of services, and if funds fail members at any time, the investment team could also be tarnished.
The private debt markets by nature are less transparent than public markets and managers should be held accountable for any misinformation and dishonest disclosure to investors, credit manager Polen Capital has acknowledged. But it has warned that over-regulation in the sector could restrict investment freedom.
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