The Australian Prudential Regulatory Authority (APRA) reckons super funds have some 'valuation homework' to do.
👉 Background: Superannuation funds manage more than $3.3 trillion on behalf Australians. These super funds invest in property assets, bonds, infrastructure, venture capital funds and tech companies, including Canva. At its peak in 2021, Canva was valued at a whopping $40 billion USD. But since then, its valuation has more than halved, according to some of its investors.
👉 What happened: Now the Australian Prudential Regulatory Authority (APRA), reckons super funds have some 'valuation homework' to do. They think super funds have been too slow to adjust their valuation of Canva.
👉 What else: And APRA is concerned that improper valuations of private companies could impact their entire super portfolio.
💡Super funds that dip their toes into volatile private assets are playing a dangerous game.
💡The challenge is that unlisted assets are not traded on a public exchange, which makes them difficult to value. And when they are re-valued, it can often be subjective and based on estimates.
💡So it makes sense that APRA is pushing for superannuation funds to revalue their unlisted assets quarterly or even more frequently. It's especially important in times like these when valuations are fluctuating.
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