Industry Super Funds – Lenders of First Resort

There is a growing trend in the Australian superannuation industry landscape.

We’ve seen large super funds investing in infrastructure (tollroads, airports), agriculture (avocados), pastoral enterprises and finance property development.

Now, behemoths such as AustralianSuper are ‘lending to’ or underwrite the acquisition of businesses and assets in receivership.

One recent example is AustralianSuper’s partnering with resources private equity fund, RCF in a distressed lithium ‘play’.

Surely, these mega funds will be courted increasingly because if you think Private Equity is regarded as ‘patient capital’, then quadruple that timeline and you’ll resemble a large industry pension fund.

The larger topic is to see Industry Super Funds become a mainstream lender to business, ultimately unlocking a nearly $3 trillion pile of money.

This has been discussed for a couple years.

Perhaps Super Funds can provide a banking lending service?

November 8, 2020
by Rob Zdravevski
rob@karriasset.com.au

https://www.afr.com/street-talk/aussuper-piles-into-230m-pilbara-deal-to-buy-altura-20201028-p569b3

https://www.afr.com/wealth/superannuation/industry-super-funds-ready-to-lend-to-business-20180902-h14u7u

Bullish on Aussie Banks

After 5 years, I have now become bullish on Australian banks.

For example, Westpac Bank’s 2021 forecasts have it trading below 1x book value, on a P/E of 11 and the dividend yield should be 5%, not including the franking credits.

Furthermore, I think its net interest margins will increase (as longer dates interest rates rise) and all of their bad news and fines are no longer “new news”, Westpac’s stock price also has traded at monumentally oversold readings…….not on a daily nor weekly basis, but on a Monthly reading.

See the chart below and you’ll see it’s only happened twice in 27 years.

October 19, 2020
by Rob Zdravevski
rob@karriasset.com.au

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