Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
While private credit funds have attracted much-merited attention, conducting a thorough due diligence is challenged by how portfolios are managed and constructed, let alone the risk of potential defaults. The deflective reply to investor queries about this is often akin to, “look at our past returns, we clearly know what we’re doing”.
The employer-employee split worked well when not-for-profit funds were in their infancy. Today, in an era of member choice and the growing demands of retiree members, it’s a model that fails to cut the mustard.
Bad memories of a 1970s style inflation breakout are animating monetary policy in the post-Covid world, writes Rob Prugue. And the irrational prejudice of inflation hawks means more viable tools are being discarded.
The start of any high profile corporate failure can often be traced back to a lack of fiduciary oversight, writes Rob Prugue. Shareholders have a responsibility to both appoint and monitor those who represent their interests.
Breaking superannuation into three different funding models may not be the right answer, former Lazard executive Rob Prugue writes, but at least it cuts through the fallacy at the heart of our superannuation ideal.
The scrutiny applied to internal managers rarely matches that applied to external managers, writes Rob Prugue. But underperformance is still underperformance, and if something goes wrong the member wears the risk.
As Australian superannuation assets approach A$4 trillion, politicians on both sides of the divide will be tempted to dip into this massive nest egg to meet their fiscal needs, writes Rob Prugue.
Advances in computer modelling have bred a false sense of comfort, writes Rob Prugue, as too many have stopped challenging econometric outputs and blindly implement them without truly understanding their consequences.
Despite their unprecedented nature, there has been little challenge to the conventional wisdom surrounding the profound shocks of the last two years. In his new monthly column, Rob Prugue shakes up the debate.
