MP presses super funds on liquidity bailouts

The chair of a parliamentary committee has been asking superannuation funds if they have shelled out any cash to REST, Hostplus or any of their other peers, in a line of questioning around liquidity.

Liberal MP and chair of the House of Representatives standing committee on economics Tim Wilson has issued questions on notice to funds asking if they have provided any liquidity or loans to REST, Hostplus or any other fund since 12 March.

Answers from UniSuper, Intrust Super, BT and Energy Super published on Monday and Tuesday came back with a resounding no.

Maritime Super also responded with a negative answer, in its document released last week.

However, BT allowed some ambiguity in its response, stating it may have facilitated cash flows to other funds by allowing its super members to invest in external products via its Panorama Super, SuperWrap and Asgard platforms.

“These investments could potentially provide liquidity to REST, Hostplus or any other superannuation fund,” BT stated in its written answer.

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“However, this level of detail is not provided to BT by our external investment managers or the external responsible entity or issuer of the investment.”

Hostplus and REST have previously stated in their answers that they both have not received any liquidity or cash loans from any industry or retail funds. They also both said IFM Investors has not given them loans.

Meanwhile IFM said while it has provided cash distributions and paid returns to its investors, it has not provided a loan to any fund since 12 March.

Mr Wilson has previously scrutinised super liquidity in light of the early release scheme and the shaken up markets.

Looking at the other newly published responses, information was revealed about funds’ investments with IFM Investors and ME Bank.

Mr Wilson has been asking the funds if they have commissioned reports into the bank’s valuations in the past decade, to which UniSuper, Intrust, Maritime Super and Energy Super said no.

UniSuper said its total capital invested with ME Bank came to $12.6 million, all of which was invested more than five years ago.

It also holds an investment in an IFM Global PE Fund, with total capital invested of $916,603.

Energy Super’s total investment in ME Bank was valued at $11.2 million, as at 31 May, while Maritime Super’s share was valued at $558,000 at the end of 2019.

As revealed in a hearing with the committee in May, ME Bank has never paid a dividend to the industry funds that own it.

ASIC also confirmed to the committee, in a written answer released on Friday, that Mr Wilson had not asked the regulator about conflicts of interest with retail funds, after he demanded an inquiry into the industry segment and their vertical integration models in May.

MP presses super funds on liquidity bailouts
Tim Wilson
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