NAB questions growing dominance of super funds

The growing number of assets held by superannuation funds is concerning NAB which has questioned if they will hold undue influence over firms as large shareholders in the future.

Speaking in the House of Representatives standing committee on economics, NAB chief executive Ross McEwan said as super funds assets grew, they could end up holding larger shareholdings in firms.

Funds such as Australian Super and UniSuper, both named by McEwan, had $172 billion and $100 billion.

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“There is a lot of money coming into the ASX [Australian Securities Exchange] from super funds and they will be taking a large portion of ownership of banks in the future. That is not a concern for us yet as they haven’t interfered yet but they will have their own views,” he said.

“Super funds work with asset managers who manage the money for them and have feeder funds run by someone else so we do speak to their asset manager and to the super funds’ chief investment officer but so far that has been about our performance rather than any influence on policy.”

Committee member, Jason Falinski, highlighted industry super funds already held 27.3% in NAB’s voting share and were represented by voting proxy group, the Australian Council of Superannuation Investors (ACSI).

McEwan said: “They definitely could have a voice at that size but would they be able to get a resolution up? They can say what they like but it doesn’t mean we have to do what they say unless they can get a resolution voted on by all shareholders.

“No-one has told me directly what to do, they have their own views but haven’t told me anything specifically.”

He said he did not meet with proxy voting groups but that chair Philip Chronican spoke with them on matters on remuneration, climate change and governance in advance of the annual general meeting.

The firm’s two largest shareholders were currently Vanguard and BlackRock thanks to their large proportion of index funds which had to hold the stock and McEwan said he spoke to them “once a year, maximum twice” on business strategy.

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