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Retail funds lead industry peers in private debt exposure
APRA’s latest statistics have revealed retails funds have a larger exposure to private debt than their industry counterparts.
Amid ASIC’s increased scrutiny of superannuation’s growing role in the evolution of private markets, new data from the prudential regulator has revealed retail funds had $10.6 million allocated to private debt at the end of 2024, equalling 1.3 per cent of their total investments.
Industry funds’ exposure to the asset class that ASIC readily refers to as “opaque” stood at $14.3 million or 1 per cent.
Interestingly, APRA-regulated public sector funds had the largest exposure to private equity of 6.4 per cent or $29.5 million, followed by industry funds with 5.1 per cent, corporate funds with 4.1 per cent, and retail funds with 2.6 per cent.
While equities were the most favoured asset class among all funds, funds’ exposure to international equities topped their exposure to domestic equities, with industry funds allocating a total of 31.7 per cent to international listed equities (hedged and unhedged), compared to 22.9 per cent to Australian listed equities.
Retail funds had a 26.7 per cent exposure to domestic equities, compared to 31.4 per cent to international equities, while public sector funds sunk 19.4 per cent of their investments into domestic equities and 33.1 per cent in their international counterpart.
Speaking to SuperReview earlier this week, SuperRating’s chief director Kirby Rappell said funds’ shift away from Australian shares has been ongoing for some time, but is likely to become more pronounced as capacity limits are reached.
“Over this time, we have seen the reduction in Australian shares, as well as the rise of alternative assets,” said Rappell.
“To sustain growth and be able to deploy assets, large funds are increasingly global and needing to find opportunities that can sustain long-term outcomes,” he added.
Following equities, fixed income was the second most popular asset class among APRA-regulated funds, particularly among corporate funds which allocated 26.5 per cent to the asset. Public sector funds followed with 20.3 per cent, industry funds with 19 per cent, and retail funds with 18.8 per cent.
Infrastructure too was largely popular, especially among industry funds which allocated 10.7 per cent to the asset, with a majority or 9.7 per cent going towards unlisted infrastructure. The divide between domestic and international unlisted infrastructure was fairly even among industry funds with allocations of 5 per cent and 4.6 per cent, respectively.
Retail funds had only a 3.6 per cent to infrastructure, with just 1.7 per cent of that sitting in unlisted assets.
Property too was more popular among industry funds with a 6.9 per cent allocation compared to 5.9 per cent from retail funds, with unlisted property garnering a 5.1 allocation from industry funds, compared to just 1.5 per cent from retail funds.
AUTHOR
Maja Garaca Djurdjevic
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