HostPlus

The Albanese Government has begun to explore the potential negative impacts of super fund consolidation. The question is whether a super fund can ever be too big to fail.

Hostplus CIO Sam Sicilia believes the trillions of dollars washing around super could be put to good use in nation-building projects – and that criticisms of investing in unlisted assets are an “absurdity”.

Overseas, Australia’s biggest super fund is a small fish in a massive pond. To achieve the scale it wants it will have to dive deeper into the private markets, meeting stiff competition from its North American peers along the way.

Australia’s super funds have been leaders in adopting private markets investing, but they’ve still got a long way to go. Overcoming the obsession with liquidity will be one hurdle, says the boss of $900 billion private markets manager Hamilton Lane.

Super fund members have been “spared the worst”, while the outperformance of the top ten funds was generated by active management and chunky allocations to private markets.

“When it comes to super, all the evidence points to the more you pay, the less you get. There’s lots of reasons for that, the most fundamental of which is that active management really struggles to outperform the market.”

Super fund data companies are rushing to beat deadlines for June 30 figures, with heightened interest from industry participants and members. The median balanced fund was minus 3.3 per cent, SuperRatings said.

While big super is all in on its newly-acquired nation building goals, a hint of caution about member outcomes pervaded last week’s AIST Superannuation Investment conference.

Some within the sector believe the super wars are over and that industry funds have emerged victorious. But they shouldn’t take their primacy, or the change in government, for granted.

Hostplus is navigating the current market upheaval – and a murky future – by pumping more money into unlisted assets. But despite a gloomy outlook, the “innovation genie” isn’t going anywhere.