The challenge for Australia is the ability to use the financial resources generated by superannuation and the private wealth market to exploit new and emerging opportunities, according to Rice Warner.
The research house said, given the uncertainty the COVID-19 pandemic had brought, the country needed to think about the impact of the size and share of the super system which was the biggest engine available to finance the investment Australia needed.
While understanding future growth of super assets and where they might be deployed was essential to planning, modelling would be a significant challenge this year due to the pandemic.
“Whilst a permanent reduction in the population growth rate would provide an opportunity for per capita GDP to grow and enrich all Australians, the political mantra of growth for its own sake will probably prevail,” Rice Warner said in an analysis.
It said the differences to modelling this year were:
Rice Warner said short-term impacts included:
The research house noted that knowing these factors had moved to “extremal values was only part of the challenge” and that estimating the extent of the divergence in these factors from long-term trends, and how long the divergence would last, added significantly to the complexity and uncertainty of modelling.
“Rapid V-shaped changes in equity market valuations do not translate directly to the broader economy. Scenario testing will be very important this year,” it said.
The $75 billion fund has gained exposure to decarbonisation solutions in its first listed equities impact investment.
The superannuation fund is expanding its investment exposure to industrial property through a $1 billion partnership with Barings, a global investment manager.
AustralianSuper has usurped the Future Fund as the biggest Australian asset owner, jumping from 43rd to 36th place globally, according to an annual study by the Thinking Ahead Institute.
IFM Investors, the global institutional asset manager owned by superannuation funds, has signed a memorandum of understanding with the UK government to invest £10 billion by 2027.
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