Covid-19: Australian superfunds move to revalue unlisted assets

Two of Australia’s largest funds, AustralianSuper and UniSuper, have booked significant devaluations of their unlisted asset portfolios in response to the coronavirus crisis.

Australian superannuation funds have begun the process of downgrading the value of their unlisted assets following the coronavirus crisis, with two of the country’s largest funds confirming substantial revaluations this week.

AustralianSuper, the country’s largest superfund with A$172.4 billion ($103.1 billion; €95.3 billion) of assets under management as of 30 June 2019, told members on Monday that it had reduced the value of unlisted assets in its portfolio by 7.5 percent on average, reports sister publication Infrastructure Investor.

The fund declined to provide any further details on the implications for specific asset classes but said this had resulted in a 2.2 percent reduction of any member who held savings in the fund’s Balanced Option.

AustralianSuper chief executive Ian Silk said in a statement that the move had been made so that members could have an up-to-date picture of their superannuation balances and “reflect all the available information at the current time”.

The fund said in its 2019 annual report that its infrastructure portfolio was valued at more than A$16.5 billion. It holds stakes in assets including the WestConnex toll road, Brisbane Airport, Melbourne Airport, Perth Airport, and NSW Ports, either directly or in investments managed by IFM Investors.

UniSuper, Australia’s fourth-largest fund with A$83.2 billion of assets under management as of 30 June, also moved to downgrade assets.

A spokeswoman confirmed to Infrastructure Investor that its unlisted infrastructure portfolio had been revalued downwards by 6 percent and unlisted property had been revalued downwards by 10 percent.

UniSuper’s 2019 annual report shows that it had approximately A$3.8 billion invested in infrastructure and A$4 billion invested in property. It holds investments in Brisbane Airport and Adelaide Airport, among other assets.

Other superannuation funds are expected to follow suit with downward valuation revisions for their unlisted assets after equity markets plummeted in recent weeks, with members switching in large numbers away from growth options and increasing their allocations to cash.