Super funds urged to continue private equity allocations

9 May 2007
| By Mike |

Australian superannuation funds have been urged to continue including private equity as part of their asset allocation, irrespective of the controversy surrounding the future of Qantas.

Investment manager, private equity, with Industry Funds Management Gareth Adams told the Conference of Major Superannuation Funds on the Gold Coast that private equity should remain part of the asset allocation equation for fund trustees.

He said, however, that private equity was a relationship business, and investors needed to ensure those managing their investments could access the appropriate opportunities.

“If done well, (private equity) can help the economy and drive positive returns for investors,” Adams said.

However, he acknowledged that there were instances where companies had been ‘taken private’ and then returned to the market without any discernible improvements having been made.

“Where it works for everyone is when a company is delisted and the organisation is changed for the better,” Adams said. “When you have a situation where a company is delisted and nothing much changes, then that does not work for anyone.

“When companies are taken off the market and then structural change is implemented, that is where value occurs,” he said.

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