The Australian superannuation fund industry’s perceived reluctance to invest in agriculture is to be the subject of a parliamentary inquiry.
Last week, the House Standing Committee on Agriculture and Water Resources announced it would inquire into superfund investment in agriculture.
The inquiry will look at whether there are any regulatory requirements imposed on superannuation funds by the Australian Securities and Investment Commission, the Australian Prudential Regulation Authority and other regulators that are acting as a break on supers’ involvement in agriculture.
In addition, it will assess if the information required by the funds to invest in Australian agriculture is readily available and, if not, what performance reporting on the agricultural sector would help bridge this gap; it will also try to identify any other practical barriers to super investment in Australian agriculture.
The committee’s chairman is Coalition MP Rick Wilson, who represents the seat of O’Connor in Western Australia. “The agricultural sector in Australia needs much more investment if it wants to remain competitive, and the superannuation industry is an obvious source of that. With this inquiry, the committee hopes to find out how investment can be encouraged,” he said.
Superfund investment in Australian agriculture has long been a topic of debate, with many questioning why the funds, with so much capital to deploy, have been reluctant to invest in the sector.
Agri Investor reported in April that Australian superannuation funds are considering creating a new vehicle to directly invest in domestic agriculture in a rough equivalent of IFM Investors, the platform created 20 years ago to invest in infrastructure. Sam Sicilia, CIO of Hostplus, said at the time that the sector was becoming less risky for investors and more relevant to their portfolios, creating the right circumstances for institutions to deploy capital.
The committee has invited submissions addressing the terms of reference to be made by June 22.