APRA's worried about what the super funds are doing, or NOT doing, with their private investments.
👉 Background: Super funds in Australia manage over $3 trillion worth of our retirement funds, which they've traditionally invested in a range of 'safe' assets.
👉 What happened: Over the last few years, some super funds have dabbled in different asset classes like private equity, venture capital funds and startups. These asset classes make up about 8% of Hostplus fund, which also has a significant stake in Canva. So how does this come back to APRA?
👉 What else: Some of Canva's investors have slashed their valuation of their Canva stake by ~60%, but we have no idea whether super funds are also writing down their stake. And APRA's worried.
💡A write down is what needs to be done when the value of an asset falls below the value you've currently got on the books. It's an attempt to keep track of how much an asset is really worth, as opposed to how much it was worth on paper - aka the 'book value'.
💡So let’s say Canva was valued at $40bn USD in its last round.. But the market reckons its now worth only $20bn. That means your stake in Canva should be written down by 50%.
💡If other investors have done a massive 50% write down on their Canva stake… the question is, have the super funds done that too? TBC.
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