FS Newspaper vol23n14

Opinion: Pruksa Iamthongthong, Aberdeen Investments 11

Executive appts: AIA Australia, La Trobe, Australian Ethical 12

Feature: Private markets

ASIC ‘probe’ positive for private credit

Eliza Bavin

Anumber of private credit managers in Australia have taken part in a survey supplied by the corporate watchdog as it continues to probe the sector.

ASIC has been eyeing Australia’s private credit markets for some time with public discourse building after media reports suggested Metrics Credit Partners was facing increased scrutiny from the regulator.

Metrics denied any knowledge of the ASIC investigation related to specific practices or transactions within its business.

“In line with our peers and industry bodies, Metrics has actively participated in industry responses related to ASIC’s review of private and public markets, and like our peers has responded to requests from ASIC for information to assist its review of private and public markets,” Metrics said in a statement.

“We are fully supportive of the role of regulators in ensuring the integrity and proper functioning of Australian financial markets and welcome strong, fit-for-purpose reforms.”

Financial Standard understands ASIC sent out a survey to a number of private credit managers in Australia seeking clarification around reporting standards to ensure greater transparency in the sector.

Tanarra Credit Partners took part in ASIC’s survey. Tanarra’s managing partner Peter Szekely told Financial Standard that ASIC’s probe into the sector is a welcome one.

“Private credit has been one of the fastest growing asset classes in Australia the last five years. So, it’s no surprise that ASIC is looking into it,” Szekely says.

“We did receive a survey request from ASIC, and we understand that we are one of many private credit managers that received that survey, and it’s really helping them just understand the scale and dynamics of the market.

“But what I think they’re really focused on is increasing consistency and transparency around reporting and valuations.”

The exact amount of money flowing into the private credit market is unknown, but Alvarez & Marsal research suggests the market reached $205 billion as at December 2024.

Szekely says what has maybe triggered ASIC’s focus has been the increase in high-net-worth and retail investors flooding to the sector.

Centuria Bass’ latest Private Real Estate Credit Index, which surveyed more than 100 Centuria Bass Credit (CBC) investors, found 76% of respondents said they would increase their private real estate credit investments over the next year.

“Obviously, the investor needs to understand what your methodology is around. For example, valuation being the important one. Speaking for Tanarra, we have an evergreen fund so there will be investors buying in and selling out of the units. Clearly, you need to have a market price which reflects the actual underlying value,” he says.

“So, from our point of view, we welcome it, and we think it’s good for the sector. You want to have investors feel that they’re investing in a properly regulated product, and not have concerns about opaqueness in the underlying reporting.”

Szekely says Tanarra has not received anything from ASIC beyond the initial survey that was sent, but says he is feeling optimistic about having consistent reporting standards in the industry.

“We feel we’re transparent in how we reflect valuations in our reporting, and obviously that does affect your returns, but we think that’s critical for faith from the general public in the industry,” Szekely says.

“I don’t think anyone is trying to be dishonest, but I think just being transparent in terms of having consistency [will be a positive for the sector].

“So just knowing that what we’re reporting is using the same methodology and approaches as competitors is a real positive so you’re not trying to compare apples and oranges, and not being 100% clear in terms of how a manager is approaching valuations and reporting.

“I’m for transparency in the market. That will attract more investor demand, because people have comfort into what they’re investing in.”

ASIC has remained somewhat quiet on potential concerns in the sector since issuing its discussion paper in February.

At the time ASIC chair Joe Longo said: “Public and private markets support one another, and both are critical to our economy, so it’s important we approach this from both an opportunity and risk perspective. The critical point for ASIC is whether there is a need for interventions to address risk or adjustment to how regulation operates to take advantage of opportunities important for the attractiveness of our capital markets.” fs

Peter Szekely Tanarra Credit Partners

Profile: Georgina Dudley, JANA

ASIC sues Fortnum

Karren Vergara

ASIC is suing Fortnum Private Wealth for allegedly failing to manage and comply with its cybersecurity obligations that exposed the information of its financial advisers and clients.

In the NSW Supreme Court, ASIC alleges Fortnum exposed its authorised representatives (ARs) and clients to an “unacceptable level of risk of a cyber-attack or a cybersecurity incident”.

Fortnum introduced a specific cybersecurity policy from April 2021. ASIC said that the policy was not an adequate response to manage cybersecurity risk.

Between 2021 and 2022, ASIC found RedThorn, one of Fortnum’s practices, being subject to a cyber-attack where emails were sent purporting to be from one of RedThorn’s advisers.

Another was Eureka being the target of a phishing attack which resulted in an unknown threat actor gaining access to at least one employee’s email account and sending

Continued on page 4

Insignia accepts CC Capital bid

Insignia Financial entered into a Scheme Implementation Deed (SID) to be acquired by New York-based CC Capital Partners for a value of $3.3 billion.

CC Capital has agreed to acquire all the issued shares in Insignia for a cash consideration of $4.80 per share.

The value represents a 56.9% premium to Insignia’s closing share price of $3.06 on 11 December 2024 – being the last trading day prior to the announcement that Bain Capital made the first official bid for the company.

However, the final price was reduced from the previous $5 per share offer made by CC Capital back in March.

“The Insignia Financial board unanimously recommends that shareholders vote in favour of the scheme in the absence of a superior proposal, and subject to an independent expert concluding (and continuing to conclude) that the scheme is in the best interest of Insignia Financial

Continued on page 4

By Karren Vergara

Will you accept this rose?

In season six of the Bachelor Australia , the bachelor, Nick Cummins, did something unprecedented on reality television that shocked the nation.

He rejected the two finalists, leaving them heartbroken. For a minute there, we all felt that Insignia Financial, too, wouldn’t hand out the final rose.

Only in this case, Insignia had three suitors in Bain Capital, CC Capital Partners and Brookfield Capital Partners at one point. Two swiftly fell like dominoes, leaving CC Capital the last one standing, clutching its pearls and bewildered as to whether or not the union would go ahead.

When CC Capital breached its own July 14 deadline with which to make its final offer, pundits were predicting that the private equity firm got cold feet. Eight days later, however, CC Capital took the plunge and made Insignia a $3.3 billion offer it couldn’t refuse. CC Capital proved it was willing to fight for Insignia by offering to pay $4.80 per share – representing a 57% premium on its prevailing share price. If that’s not an expression of love and commitment in the financial realm, I don’t know what is. Particularly

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Michelle Baltazar

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Matthew Wai

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when others exit the party, it’s tempting to follow the crowd. But not CC Capital. It saw something special in Insignia the others did not.

CC Capital’s commitment is just a subset of the tango taking place between private equity firms and fund managers in Australia in recent years.

Last December, Oaktree Capital Management splashed $240 million on AZ NGA, taking a chunk out of Azimut’s ownership.

Adamantem Capital, with more than $2 billion in funds under management, acquired managed accounts provider Mason Stevens in April.

KKR could have been the owner of ASX-listed Perpetual’s corporate trust and wealth management businesses if it had not been for that pesky tax bill that ruined it all.

This could have added to the trophy cabinet of Australian companies it already owns or has stakes in, such as Arnott’s Group and Latitude Financial Services.

Let’s not forget that Russell Investments was sold to TA Associates in 2015.

TA Associates has since been buying it up

www.financialstandard.com.au

Down Under. In 2021, it invested an undisclosed amount in Betashares and took a 50% stake in the fund manager. It recently bought into Viridian Advisory Group, which has some $16 billion of client funds.

We can see why CC Capital stuck to it guns given that other major private equity players see immense potential in Australian fund managers and have had success in achieving their objectives in the relationship.

Besides, Insignia has several things going for it at the moment such as rosy inflows during the June quarter that reached a record of $1.2 billion in MLC Expand as well as the launch of a new retirement income strategy – MLC Retirement Boost – in August (see pg. 3).

Insignia shareholders, though, will have to vote on the scheme of arrangement in the first half of 2026. If it all goes to plan, the transaction should complete shortly thereafter. While that may be a while away, anything could happen between now and then.

But like building any good, strong partnership, let’s take it one day at time. fs

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Treasury consults on product labels

Matthew Wai

The government has initiated a consultation phase on sustainable investment product labelling, releasing a paper aligning to its Sustainable Finance Roadmap.

The government is seeking industry-wide feedback on a framework for sustainable investment product labels, which will help investors and consumers “identify, compare, and make informed decisions” about relevant products.

“The objective of sustainable product labelling is to ensure that investors have confidence in the sustainability claims made by product issuers, and to ensure that investors can confidently compare different products making sustainability claims,” Treasury said.

It is specifically asking for feedback on the investment approaches that should be considered ‘sustainable’; the circumstances in which a product issuer could choose or would be required to use a product label; and evidence that should be required to substantiate use of a label.

The consultation also aims to clarify what ‘sustainable’, ‘green’ or similar words mean when they’re applied to financial products.

The paper includes current regulation and disclosure requirements for financial products, overseas frameworks, and some designed options for potential framework.

Treasury believes that sustainable financial product labels could complement the increasing information available to investors following implementation of climate-related financial disclosures under Priority 1 of the Sustainable Finance Roadmap. It’ll also be supported by other relevant developments, Treasury said, including the Australian Sustainable Finance Taxonomy as part of Priority 2 Developing the Australian Sustainable Finance Taxonomy.

“This is another practical step in the roadmap to improve how we measure progress, manage risk, demonstrate results and mobilise the investment we need to reach net zero and other sustainability goals,” the Treasury statement said.

“The roadmap is all about helping to mobilise the capital required for Australia to become a renewable energy superpower, modernising our financial markets and maximising the economic opportunities from net zero.”

As a result, the government is inviting feedback on policy options for a possible sustainable financial product labelling framework, as well as questions in the consultation paper.

The consultation will run until August 29. fs

01: Scott Hartley chief executive Insignia Financial

TAL, Challenger launch MLC Retirement Boost

Karren Vergara

MLC has partnered with TAL and Challenger to develop a retirement income solution – MLC Retirement Boost.

MLC Retirement Boost operates like a standard superannuation account that allows customers to boost their income during retirement due to the concessional treatment of lifetime income streams.

The quote

Gone are the days of people fully stopping work and withdrawing their super as a lump sum.

MLC Retirement Boost will be available on the Expand platform for advisers to use with their superannuation clients from August.

Insignia Financial chief executive Scott Hartley01 said until now the super industry has treated the accumulation and decumulation phases entirely separately, and “we don’t think that accurately reflects how most people view retirement.”

“Gone are the days of people fully stopping work and withdrawing their super as a lump sum.

Australians are choosing to work for longer, scaling back their hours or even changing careers later in life. They are travelling more, helping care for grandkids and enjoying their retirement journey in more individual ways,” Hartley said.

MLC Retirement Boost will be housed under the “Centre of Excellence”, which will also

have distribution specialists, digital advice and modelling tools, including a new Retirement Boost Optimiser tool.

Hartley added that MLC Retirement Boost will provide more options and flexibility to deliver personalised retirement income strategies to advised clients in the next 12-18 months. In the deal, Challenger will deliver the retirement expertise and distribution services.

“Backed by 40 years’ experience in retirement innovation, investment management and distribution, we’re proud to help lead this shift – through partnerships like this –that will enable more Australians to have financial security in retirement,” Challenger chief executive and managing director Nick Hamilton said.

TAL group chief executive and managing director Fiona Macgregor commented: “We’re excited to extend our partnership with MLC to design and develop an innovative retirement solution for MLC Expand platform clients. This partnership reflects our commitment to supporting Australians.”

TAL recently launched backed in partnership with Cover Genius, a direct-to-consumer product targeting those with limited access to affordable cover options. fs

Investments, advice complaints jump 18%

Investments and financial advice complaints jumped 18% in the 2025 financial year, thanks to the failures of United Global Capital, Shield Master Fund, First Guardian Master Fund and Brite Advisors.

This is according to the Australian Financial Complaints Authority (AFCA), which took in a total of 4193 submissions for the period.

There was a whopping 95% rise in complaints involving SMSFs to 1323, comprising one third of complaints in investments and advice.

Complaints alleging failure to act in the client’s best interest rose 124% to 1266.

“What we’re seeing in complaints is a clear pattern of conflicted advice models and the inappropriate use of self-

managed super funds that ultimately isn’t in the customer’s best interest,” AFCA chief executive David Locke said.

“This only highlights the need for the Compensation Scheme of Last Resort for victims of unlawful advice.”

Conversely, superannuation complaints dropped 16% year on year to 6164, while life insurance-related complains rose 5% year on year to 1518. One bright spot was the 45% decline in scam-related complaints to 5977.

“Whilst any decline is positive and we welcome the progress made by government and industry to prevent scams, caution should be exercised in interpreting AFCA’s scam numbers,” Locke said.

Overall, AFCA received above 100,000 complaints in FY25, down 4% from 104,861 received in the prior period. fs

ASIC sues Fortnum

Continued from page 1

1266 emails containing phishing links from that employee’s account, while Wealthwise experienced a major data breach.

When Fortnum revised its policy in May 2023, ASIC found several of its ARs experienced cyber incidents, one of which was a cyber-attack that allegedly led to a major breach and saw the data of more than 9000 clients published on the dark web.

Fortnum Private Wealth chief executive Matt Brown said: “We strongly refute ASIC’s allegations that FPW failed to meet its obligations with regard to appropriate cyber controls over the period 2021-2022 and will vigorously defend our position.”

Brown said that ASIC’s claim references one main cyber-incident and four smaller occurrences in 2021-2022.

“The main incident related to legacy data held by a FPW authorised advisory practice for record keeping purposes, from a prior licensee for about 9828 clients. It did not include records where FPW had delivered the advice.”

Brown went on to say that regulatory reporting of the incident and any client remediation was completed in a timely manner.

“There was no client financial loss detected; however, we sincerely regret the concern that those clients may have experienced, at that time. The other four incidents related to email phishing attacks that occurred within individual financial advisory practices authorised by FPW, rather than FPW itself,” he said.

Overall, ASIC alleges the advice firm did not meet its AFSL obligations as it failed to have adequate policies, frameworks, systems and controls in place to deal with cybersecurity risks. fs

Insignia accepts CC captial bid

Continued from page 1 shareholders,” the board said.

The scheme is subject to various conditions, including that shareholders vote in favour of the scheme and regulatory approvals.

Insignia said, subject to approvals, it expects the scheme will be implemented in the first half of calendar year 2026.

If the scheme has not come into effect by 22 July 2026, Insignia said it would be permitted to pay a special cash dividend, based on a 50% payout of underlying net profit after tax for each calendar month that has elapsed from 22 July 2026.

“The offer recognises the underlying value of the Insignia Financial business, our associated brands including MLC, and our vision to become Australia’s leading and most efficient wealth management company by 2030,” Insignia chief executive Scott Hartley said.

“We are and will continue to be focused on executing against our strategy and delivering for our customers and shareholders.”

CC Capital was the only player left in what was a bidding war for Insignia after Bain Capital withdrew its bid back in May and Brookfield Capital Partners dropped out after making a single offer back in February. fs

01: Richard Webb superannuation lead CPA Australia

quote

The federal government must take action to help alleviate the burden of regulation and costs faced by advisers before the shortage becomes an irreversible crisis.

THREE LINE HEAD

Adviser exodus puts retirement savings at risk: CPA

Karren Vergara

CPA Australia says the drastic exodus of financial advisers has put Australians’ retirement money at risk, possibly leading them to invest in higher-risk schemes.

According to the Financial Adviser Register, there are only 15,300 advisers left in the sector, which has nearly halved from 26,500 in 2019.

CPA Australia superannuation lead Richard Webb 01 says a mountain of red tape is a key contributor to financial advisers quitting the profession and the government must urgently act to solve the problem.

“More than 2.5 million Australians will retire in the next decade – and many will be shocked to discover there are fewer than 15,300 professional financial advisers to assist them with some of the biggest decisions of their lives,” Webb said.

Citing CoreData and Conexus Financial research, an increasing number of Australians nearing retirement plan to reinvest their nest egg savings outside of super and move it into speculative and potentially volatile investment options such as cryptocurrency, gold and property.

“With the increasing propensity of retirees to leave their super funds and seek higher investment returns through risky investments, expert financial advice is needed now more than ever,” he said.

Unless urgent action is taken to reverse the increasing shortage of advisers, Webb added that too many Australians will start their retirements without receiving the professional advice they need to ensure they have secure and reliable retirement incomes.

Several reforms must be prioritised by the government, he urged, namely finalising the post-implementation review of the Compensation Scheme of Last Resort (CSLR), updating financial advice education standards and changing the financial advice best interest duty.

“Investing retirement savings is complex, and carries with it intricate tax and super settings, asset tests and administrative burdens. However, getting the right advice is only becoming harder to find and more expensive,” he said.

“The federal government must take action to help alleviate the burden of regulation and costs faced by advisers before the shortage becomes an irreversible crisis.” fs

Missing personal information can boost retirement income

Considering personal and financial circumstances for retirees could increase their retirement incomes between 3% and 51%, according to a new Vanguard study.

To uncover the impact of missing personal information on retirement income strategies, Vanguard’s Delivering Improved Retirement Outcomes at Scale report was able to quantify how more personal and household data that goes into a retirement income strategy can result in better outcomes.

The study used three approaches to retirement income strategies to explore the quality of retirement outcomes given prevailing behaviour and current policy arrangements: minimum withdrawals, superannuation fund guidance and the incorporation of an individual’s full information.

As the complexity in financial situations increased, the modelling found that incorporating the full information of a member upped projected annual retirement incomes by

3% to 51% compared to the minimum withdrawal strategy.

Meanwhile, superannuation funds’ limited advice guidance or “best-efforts strategy” increased projected annual retirement incomes by 3% to 34%, compared to the minimum withdrawal strategy.

“The study findings have implications for retirement advice. While individuals have access to the full scope of their personal information, they may lack the financial acumen to optimise their retirement income according to their financial circumstances,” Vanguard said.

“Professional advisers, however, could significantly increase expected retirement outcomes using a greater extent of additional personal information, given their retirement planning expertise.”

Superannuation funds can play a key role for members who cannot or do not want to engage a financial adviser, the study suggests, but they are limited in their ability to access and use personal information at scale. fs

The

ISS MI acquires Autus

ISS Market Intelligence (ISS MI) has acquired UK-based Autus Data Services, a provider of data, analytics and insights to the global financial services industry.

Autus will become part of ISS MI’s MarketPro, which provides comprehensive, accurate, and actionable distribution intelligence for major financial services markets.

Founded in London in 2017, Autus works with other businesses such as asset managers, platforms and brokers and provides a range of data.

It uses the Financial Conduct’s Authority (FCA) Register to analyse details of more than 70,000 financial services firms and 220,000 individuals.

These capabilities will further enhance MarketPro’s UK-focused solutions, which empower clients to better identify, target, and engage with financial intermediaries operating in the UK market.

Rainmaker Information recently rebranded the RainmakerLive terminal to Rainmaker MarketPro and introduced several key product updates.

Head of ISS Market Intelligence Ben Doob said: “This acquisition reflects our continued commitment to deepening our presence in the UK and providing an unmatched set of solutions to our clients. Autus brings both high-quality data and deep domain expertise that will further enhance our MarketPro platform, enabling us to serve a broader range of clients and use cases.”

“We are better positioned today than ever to partner with UK market participants to empower their growth. I’m excited to welcome Autus to ISS MI.”

ISS MI is part of the ISS STOXX GmbH group. fs

Mental health claims spike

Matthew Wai

More Australians are leaving work permanently due to mental ill health than ever before with insurers paying out over $2.2 billion in mental health claims last year, according to new data from the Council of Australian Life Insurers (CALI).

CALI said mental health is now the leading cause of total and permanent disability (TPD) claims, making up almost one in three claims paid.

The $2.2 billion paid last year in retail mental health claims nearly doubles the amount recorded five years ago.

Further, mental ill health is also driving one in five income protection claims, with payouts totalling $887 million in 2024, CALI said.

CALI noted the trend is especially significant among younger people, with TPD claims for mental health increasing by 732% for those in their 30s over the past decade.

CALI chief executive Christine Cupitt said Australia’s financial safety net, not just life insurance, is reaching a “tipping point”.

“Every year we see a growing number of people, particularly younger Australians, leaving the workforce for good due to mental health conditions,” Cupitt said. fs

01: Bill Stone chief executive SS&C Technologies

SS&C Technologies to take over Calastone

Karren Vergara

SS&C Technologies Holdings is set to acquire Calastone for nearly $1.6 billion (£766m) upon Carlyle Group announcing it will divest the majority stake it bought in 2020.

Upon completion of the deal, which is expected to be in the final quarter of 2025, Calastone will operate as part of SS&C’s Global Investor & Distribution Solutions division.

The numbers

$1.6bn

The amount SS&C will pay to acquire Calastone.

Bill Stone 01, the chief executive of SS&C Technologies, said Calastone “has built an impressive network and platform, and together we will create a more connected, automated and intelligent global fund ecosystem”.

“This combination reinforces our commitment to delivering innovative, scalable solutions to reduce complexity and enhance outcomes for the asset and wealth management industry,” he said.

Carlyle acquired a majority stake in Calastone in late 2020 but did not disclose the financial terms of its ownership. However, it mentioned that it acquired the stake from existing shareholders Octopus Ventures and Accel.

Carlyle Europe Technology Partners managing director Fernando Chueca said: “We are pleased to have supported Calastone through such a transformational period of growth for the business. Its well-established technology network represents a differenti -

ated, automated offering and we believe the business is well-positioned to build upon its market position and business momentum. We are confident that SS&C is the right partner to continue Calastone’s success, and we look forward to watching the company thrive in its next phase.”

Founded in 2007, Calastone operates a transaction network for investment funds, connecting more than 4500 financial organisations across 57 markets, helping clients automate and scale fund operations, and create efficiencies across trading, settlement and distribution.

Stone added that Calastone’s global fund network and technology complement SS&C’s leadership in fund administration, transfer agency services, AI and intelligent automation. By combining capabilities, the two companies will deliver a unified, real-time operating platform to reduce cost, complexity, and operational risk across the global fund ecosystem as well as shaping distribution, he said.

Calastone chief executive Julien Hammerson commented: “SS&C’s global scale and deep expertise across fund services and technology will enable us to accelerate innovation and deliver new digital capabilities to the market. We look forward to working together to deliver transformational services to asset and wealth managers and drive growth.” fs

Brookfield takes stake in Cromwell

Brookfield will soon take over a 19.9% stake in Cromwell Property Group as ESR Group sells down its remaining stake.

Cromwell confirmed to the ASX that Brookfield has signed a binding sale and purchase agreement to purchase the interest. This is subject to approval by the Foreign Investment Review Board (FIRB).

Brookfield subsidiary Terbium Property will pay $0.38 for each Cromwell share, in which there are 520,849,603 ordinary securities.

In May, Cromwell confirmed media speculation that ESR launched a block trade for a portion of its stake in Cromwell and that it “received confirmation from ESR Group that it has executed the sale of a 10.8% interest in Cromwell”.

ESR Group deputy chief executive Phil Pearce commented at the time: “As part of ESR’s stated strategy of non-core divestments to simplify its business, ESR has sold a 10.8% stake in Cromwell. Post-transaction, ESR will remain Cromwell’s largest securityholder and retains a 19.9% stake, reflecting our confidence in Cromwell’s outlook”.

Cromwell has a total of $4.5 billion in group

assets under management (AUM), of which $1.4 billion sits in the funds management business.

In its half-year to December 2024 results, Cromwell reported an underlying operating profit of $55.1 million and a $28.6 million statutory loss.

ESR Australia & New Zealand specialises in industrial, business park and office real estate assets and has more than $28.9 billion in AUM.

On July 4, parent company ESR delisted from the Hong Kong Stock Exchange after it was privatised by the Starwood Capital Group, SSW Partners, Sixth Street, Warburg Pincus, Qatar Investment Authority, and ESR’s founders.

The new owners also include OMERS and Sumitomo Mitsui Banking Corporation and others. Pearce was named president of the group and continues to serve as chief executive of ESR Australia & New Zealand.

He joined ESR in 2017 and since then has held the positions of group deputy chief executive of ESR, as well leading the Australia and New Zealand business.

He previously held senior positions at Goodman Group and also worked at Ascendas REIT in Singapore and AMP Capital in Sydney. fs

IFS finds $226m in unpaid super

Matthew Wai

Industry Fund Services (IFS) has collected more than $226 million of unpaid superannuation in the previous financial year, bringing its total recoveries to over $2 billion to date.

Despite the effort, the ability to easily recover super is still a fair distance away from the total unpaid super, which currently sits close to $6 billion for 3.3 million Australians according to recent data shown by the Super Members Council (SMC).

However, IFS believes the upcoming introduction of Payday Super – which comes into effect at the beginning of FY27 – will tackle the issue by ensuring super is paid concurrently with wages, “making it easier to identify and act on non-compliance sooner.”

IFS provides support in unpaid super recovery, as well as financial advice, and consulting services to some industry funds.

Furthermore, IFS said is investing in technology and automation to enhance its Super Recoveries service to improve efficiency while reducing costs for clients.

Commenting, Cbus Super deputy chief executive and chief member officer Marianne Walker recognises the seriousness of unpaid super.

“Unpaid super is a serious issue for Cbus Super members. That’s why we are proud of the results achieved by IFS over the past financial year,” Walker said. fs

Hostplus extends MetLife contract

Hostplus has extended its group insurance partnership with MetLife Australia until June 2028. Since the inception of the partnership in 2013, Hostplus said its members have enjoyed lower premiums, improved insurance terms, and a more personalised claims experience from the life insurer.

Hostplus currently provides more than 865,000 members with Death, Total and Permanent Disablement (TPD), and Income Protection insurance through the partnership.

Group insurance is available to all eligible Hostplus members.

Hostplus chief executive David Elia said he believes the extension will deliver stronger outcomes for its members.

“Insurance in superannuation offers essential support during life’s most challenging times,” Elia said.

“Through our partnership with MetLife, we’re transforming the insurance service model – moving toward a more personalised and member-focused experience.

“This extension provides a pathway to further strengthen our collaboration and deliver an innovative and enhanced offering to our members.”

He added that the super fund remains committed to delivering lower premiums, along with improved claims processes.

Meanwhile, MetLife Australia chief executive Richard Nunn said the partnership reflected a shared vision to deliver “meaningful” insurance experiences. fs

01: Edward Cavanough chief executive McKell Institute

McKell Institute calls for CGT ‘circuit breaker’

Eliza Bavin

Anew paper from the McKell Institute calls for a major shake-up of capital gains tax (CGT) via a ‘circuit breaker’ proposal to the stalled national housing debate.

The quote

Labor has resisted change to the CGT discount for too long.

The paper suggests increasing or decreasing the CGT discount is too simple of an approach. Instead, it calls for an increase in the CGT discount on new attached builds to 70% from 50%; decrease the CGT discount on existing detached dwellings to 35%, from 50%; and leave the CGT discount on new detached dwellings unchanged at 50%.

In addition, the proposal suggests grandfathering all existing investments.

The Institute estimates the proposal would generate a 1.2% uplift on supply, helping Australia reach its target of 1.2 million homes by 2030. It also estimates this could see up to 130,000 additional homes built by 2030.

The McKell Institute said it would be submitting the proposal at the productivity roundtable.

“Labor has resisted change to the CGT discount for too long,” co-author of the

paper and McKell chief executive Edward Cavanough 01 said.

“It needs to creatively reform this poorly targeted tax concession so it works both in the interests of aspirational Australians and society more broadly.”

Cavanough said the government needs to stop seeing CGT as a “grand moral question”, emphasising that the approach has caused a stalemate and stalled progress.

“The CGT tax discount is neither good nor evil. But it should be better calibrated to actually achieve our social aims,” he said.

“Instead of encouraging property investors to bid up the price of existing housing stock we should be encouraging them to contribute to the construction of new dwellings. Our modelling shows that with a couple of simple tweaks the government could stimulate supply without affecting the budget bottom line.”

Report co-author Richard Holden added that the “hard reality is Australia just isn’t going to hit its objective of 1.2 million additional homes by 2030 if we retain existing settings.” fs

ASIC fines advice groups over unregistered advisers

Jamie Williamson

Two financial advice licensees have paid infringement notices after they were found to have authorised advisers and had them provide personal advice while unregistered, according to the corporate regulator.

Skye Money and Smart Financial Capital have both paid fines of $31,300 to ASIC for authorising an unregistered financial adviser to provide personal advice to clients.

ASIC said that it acted as it had reasonable grounds to believe both groups had authorised advisers who were not registered and that those advisers had provided personal advice to retail clients while unregistered.

Both licensees immediately registered the advisers in question after becoming aware they were not, ASIC noted.

The regulator also noted that the court could impose a fine of $62,600 for each offence, and said it considered the licensees’ response in deciding its enforcement approach.

Smart Financial Capital is the AFSL of Smart Financial, which has offices in Warilla and Nowra in New South Wales.

According to ASIC, the financial product advice the unregistered adviser dealt in here related to superannuation.

Meanwhile Skye Money is the AFSL behind Skye Wealth, which operates out of Greensborough, Victoria.

According to ASIC, the unregistered adviser presented a Statement of Advice to a client in relation to life insurance product.

“Failure to register a financial adviser creates a risk for consumers who may receive personal advice from unregistered advisers,” ASIC said.

“The registration requirement is an important consumer protection mechanism to ensure AFS licensees have considered and received declarations about whether their financial advisers are fit and proper and meet the education and training standards.”

Following the Hayne Royal Commission, the Better Advice Act from 2021 mandated relevant providers to be registered.

The registration requirement is separate to the pre-existing requirement for an AFSLs to appoint a relevant provider to the Financial Advisers Register once they have been authorised.

If an authorised financial adviser gives personal advice while unregistered, the adviser breaches s921Y of the Corporations Act and the AFS licensee breaches s921Z of the Corporations Act. fs

01: Pruksa Iamthongthong deputy head of equities, Asia Pacific Aberdeen Investments

Why Asia stands out for equity investors

Asia offers abundant growth opportunities for equity investors, presenting numerous attractive prospects across its diverse markets.

Today, the region accounts for over 60% of global growth and is home to some of the world’s largest and most innovative companies. Asia continues to grow robustly as reflected by its domestic capital formation, with the region expected to accelerate even further over the next decade, driven by stronger domestic economies, rising urbanisation, and a resurgence in investment fuelled by shifts in global supply chains.

As manufacturers increasingly move operations away from China amid tariff concerns, ASEAN stands to benefit from expanding tech supply chains and industrial investments. Countries like Indonesia are emerging as important hubs, supporting electric vehicle production and semiconductor manufacturing.

New opportunities are also on the horizon as market dislocations create fresh openings, while key trends, such as demographics, urbanisation, technological and industrial leadership, and diversification continue to gain momentum. Asia’s younger demographics and expanding middle classes are primed for strong consumptiondriven growth, fuelling demand across a diverse range of industries such as, but not limited to, retail, financial services, and real estate.

Meanwhile, the region’s technological and industrial leadership, particularly in powerhouse economies like China, South Korea and Taiwan, continues to pioneer innovation in advanced technologies – artificial intelligence, semiconductors, and electric vehicles – solidifying its place at the forefront of global advancements.

Trump’s tariffs, currencies

A common perception is that Asian economies are reliant on the US consumer to fund their export led models, and tariffs will negatively impact exporters. Of course, several Asian countries have export led growth models, but the growth of Asia’s middle class creates powerful domestic opportunities in other areas.

The markets with the strongest domestic growth have been delivered the best returns since liberation day. Indian markets rose around 5% in April. While China is probably the most exposed at the country level to tariffs (note the policy direction is highly uncertain), it is a much smaller part of the small cap universe.

Despite consensus for a stronger dollar (because of tariffs), we have seen Asian currencies rise, like the Taiwan dollar, which jumped 12% in a single day.

While we are bottom-up investors, we are conscious that the dollar is a key swing factor in relative performance for Asia. Asian countries are re-patriating some of their US dollar reserves and financial assets and investing them at home.

Asian countries are the major holders of dollar reserves – a level of financial strength lacking in the West. The positive effect on currencies and domestic economies will benefit Asian equities.

At a company level the tariffs are creating both opportunities and risks. Our focus on high quality companies means many of our holdings have sufficient pricing power to pass on most of a 10% tariff rate. We have seen high quality industrial names, such as Hyundai Electric, perform well since April. At present the US does not have the infrastructure or skills to implement a major program of re-industrialisation, so Asian companies will be incentivised to bridge the gap, charging higher prices to produce in the US and increasing global prices.

China: Hopes of rebound

Things on the ground are shifting for the better following the sharp policy pivot late last year. We are seeing increased support for the domestic economy and although headwinds persist from the property downturn, there has been early signs of a stabilisation albeit sustainability of a recovery remains uncertain.

Domestic demand in select categories have shown strong momentum driven by policy measures, particularly spending surrounding the trade-in programs. Tourism-related spending has also been robust during key holiday periods, underscoring the positive impact of policy support. One possible silver lining also lies in Chinese equities’ valuations, as many of these challenges appear to have already been priced in. Today, several companies with strong fundamentals are trading at their lows, presenting an opportune time for entry.

Historically, the reliance on stimulating the property market during economic stress created moral hazards by encouraging excessive risk-taking, which is not considered high-quality growth. While the process of deleveraging has faced setbacks, particularly during the COVID-19 pandemic, we believe such measures are vital for ensuring long-term sustainability. These developments could lay the foundation for structural changes and advancements capable of delivering substantial returns in the years ahead. The deleveraging process is further along than is widely perceived, although the weak property market is causing consumers to remain cautious. Even by Chinese standards, consumers have built up vast buffers and the central government has very little debt on its balance sheet.

Indian SMIDs strong

Indian equities have consistently outperformed both the region and global emerging markets in recent years, making it one of the best performing stock markets across this period, notably in the small and mid-cap segment.

The quote

We remain positive on the outlook for Chinese equities, anticipating more aggressive stimulus measures to support growth, particularly amid the ongoing trade conflict.

India is well-positioned to navigate a more fragmented global economy, supported by strong domestic structural drivers. Its projected growth rate remains ahead of major global economies at 6.5% (The Economic Times, 6 June 2025), fuelled by a large and growing population with rising disposable incomes. The macroeconomic backdrop remains stable, with the government maintaining its path toward fiscal consolidation while the Reserve Bank of India’s robust forex reserves provide resilience in defending the rupee. Domestic economic factors remain the primary drivers of growth, insulating India from global tariff-related trade disruptions linked to shifting US trade policies.

India’s capital market is growing rapidly, yet remains underrepresented globally, with less than 2% weight in major indices, presenting untapped investment potential. Domestic investors have become more influential, with institutional investors offsetting foreign outflows, while retail participation is steadily increasing through systematic investment plans. Despite rising engagement, household investment in equities remains relatively low at just 4%, with most savings still concentrated in property and gold, indicating room for further market deepening.

Valuation remains a perennial concern in India, especially given the strong market performance in recent years, as India has been one of the only markets to see a major re-rating. While near term challenges to earnings growth persist, the long-term outlook remains highly promising.

The future is bright

Though it is a smaller weight in the portfolio, we think Vietnam is one of the most exciting economies in Asia. GDP is growing rapidly, along with a young and entrepreneurial population. The government has levers to pull with regards to opening the capital market. We are mindful of tariff risks in the near term, but optimistic about long term growth prospects.

We remain positive on the outlook for Chinese equities, anticipating more aggressive stimulus measures to support growth, particularly amid the ongoing trade conflict. Since the policy pivot late last year, there has been a significant increase in policy measures, including fiscal support and monetary stimulus, with further measures expected. We continue to believe the fortunes of the domestic economy will be the key driver of the equity market.

Overall, valuations in Asia remain attractive compared to US counterparts, creating opportunities for investors seeking strong fundamentals at lower entry points. These dynamics make the broader region one of the most compelling investment allocations, backed by structural growth drivers and an evolving landscape poised to shape the future of global markets. fs

UniSuper delivers for members

Eliza Bavin

UniSuper has delivered a 10.3% p.a. return for it’s Balanced (default) option for the year to June 30.

Members in the Growth option saw 11% p.a. returns for the year. The two sustainable-branded options, Sustainable High Growth and Sustainable Balanced, returned 12.3% p.a. and 11.2% p.a. respectively.

The highest-performing UniSuper investment option for the year was the Australian Dividend Income option at 18.4% p.a.

“This is a bespoke option designed and managed by our in-house investments team,” UniSuper said.

UniSuper said for members in the Defined Benefit Division, the defined benefit fund remains in a healthy surplus and members’ accrued benefits are currently well funded.

“These returns are key to delivering the retirement outcomes our members deserve,” the fund said.

“As genuine long-term investors, we believe UniSuper’s portfolios are well positioned to deliver for our members.”

UniSuper chief investment officer John Pearce said the fund was happy with the outcome for members.

“We’re very pleased to deliver these returns to our members over a tough year, building on our record of strong long-term returns,” Pearce said.

“UniSuper continues to focus on investing in quality assets, adding further diversification for our members and ensuring our portfolios are well positioned for the long term.” fs

HUB24 reports $136bn FUA

HUB24’s total funds under administration (FUA) reached a record $136.4 billion at the end of June.

Net inflows for the 2025 financial year were $19.8 billion, up 25% year on year. Excluding the $4 billion of migrations during the period, net inflows were $15.8 billion.

The takeover of custody and technology solutions from Equity Trustees (EQT) namely drove the migration amounts. About $1.5 billion was migrated from EQT in October 2024.

Over FY24 and FY25, about $5.3 billion of FUA was migrated from EQT products to HUB24 and have now finalised.

FUA also surged thanks to its takeover of ClearView’s superannuation and pension business, WealthFoundations, which brings $1.3 billion in FUA.

“Our record FY25 net inflows and ongoing momentum reflect strong customer advocacy. Operating in structurally growing markets driven by demographic trends and compulsory superannuation, HUB24 is well positioned for continued growth, supported by a strong pipeline of opportunities from new and existing relationships,” HUB24 said.

The HUB24 Super Fund had 175,870 members at the end of March with $43.6 billion in member savings, according to APRA data.

The ClearView Retirement Plan had about $2.1 billion with 11,803 member accounts before it was transferred to HUB24.

The asset boost now ranks the HUB24 Super Fund as the 21st largest based on total member benefits. fs

01: James Mawhinney director Mayfair 101 Group

Mawhinney contravened law: Federal Court

Karren Vergara

In a win for ASIC, Mayfair 101 Group director James Mawhinney 01 has been associated with or involved in contraventions of the law by his companies, the Federal Court determined.

The contraventions concern the marketing of three products – the M+ Fixed Income Notes, M Core Fixed Income Notes and Australian Property Bonds – across various periods between 3 July 2019 and 5 May 2020.

Judge Button also found that the Mayfair 101 Group companies engaged in misleading or deceptive conduct from 11 March 2020 and prior to 2 April 2020 by failing to disclose in marketing material that investor redemptions had been suspended.

Furthermore, Judge Button found that another one of his companies, IPO Capital, carried on a financial services business from 2016 to December 2017 without an AFSL.

Ultimately, Mawhinney was associated with or involved in the above contraventions, Judge Button said.

However, the court did not agree with ASIC on three issues. It found that the Mayfair 101 Group did not represent that its Core Notes and M+ Notes were comparable to, and

of similar risk profile to, bank term deposits –contrary to what ASIC had alleged.

Secondly, it found the group did not make representations that were misleading or deceptive relating to the use of funds invested in the Core Notes, and the security to be granted to an investor in the Australian Property Bonds.

Lastly, Judge Button rejected ASIC’s argument that family trusts associated with Mawhinney received amounts traceable to funds invested in the Core Notes.

Last April, Mawhinney was arrested and charged with engaging in dishonest conduct for allegedly claiming IPO Wealth Group owned companies that it did not.

On his website, Mawhinney boasts that he: “Successfully launched multiple fixed income investment products through Mayfair 101 that raised over $250 million to fund various private equity initiatives.”

He also “identified, negotiated, made and managed investments across 11 countries, delivering 30%+ rate of return year-on-year” and acquired Dunk Island in 2019 as well as Isola San Spirito in Italy the year prior for a six-acre freehold development site to commence a five-star hotel development. fs

Financial services professionals pocket 12% pay rise

Financial services employees saw their pay packets rise 12% in the last 12 months, according to Hay’s annual Salary Guide, outpacing salary growth for lawyers and technology professionals.

After canvassing more than 12,000 employees from Australia and New Zealand, Hays found that the financial services sector led the pack in terms of salary growth during FY25-26.

The construction (11.7%), IT and tech system design (9.6%), legal (7.8%) and mining (6.9%) sectors also reported strong salary growth.

Such industries are most likely to offer massive salary increases of 20% or more, particularly in hard-to-fill or highly specialised roles.

The survey revealed that Australia’s executives and senior leaders are the happiest as some 75% of directors say they feel fairly paid and 72% of C-suite leaders report strong satisfaction.

The most dissatisfied are early-career

professionals as 49% of 25 to 29-year-olds and 42% of 30 to 39-year-olds complained they feel significantly underpaid.

In the financial advice sector, a financial planner in Sydney can earn between $95,000 and $140,000, while a senior financial planner can earn up to $180,000. The head of financial planning can earn between $200,000 and $280,000.

In general, staff earning under $100,000 said they feel undervalued, with 12% saying they are “grossly underpaid” for the work they do.

“A point of concern is that younger and lowerincome professionals are signalling dissatisfaction. If not addressed, this risks future workforce attrition and weak succession pipelines. This is especially problematic when we consider the value that younger or early-career professionals bring in terms of new and emerging skills,” Hays APAC chief executive Matthew Dickason said. fs

Executive appointments

Rainmaker names research director

Rainmaker Information welcomed David Gallagher as executive director of research on July 14.

After an extensive search, Gallagher has taken over the role after former research head Aman Ramrakha joined Entireti as its first chief investment officer back in January this year.

Gallagher joins Rainmaker from Bond University where he was professor of finance.

Prior to that, he was research director at RoZetta Institute from 2009 to 2024. While there he co-led the development of $100 million Commonwealth Government Cooperative Research Centre (CRC) applications.

He has also worked at the University of Queensland, Macquarie University, University of Technology Sydney and The University of New South Wales Business School.

In welcoming Gallagher, Rainmaker Information managing director Christopher Page said: “We’re delighted to welcome David as our new executive director of research, bringing an immense wealth of experience and impressive track record to the role.”

Insurer appoints interim chief

Adrian Stewart 01 is set to leave Allianz Australia Life Insurance and Allianz Retire+, with an acting chief executive appointed.

David Kane, currently chief operating officer, is stepping into the lead role in an interim capacity. Allianz said Stewart has decided to step down and take a break.

Kane has served in his current position since 2020. He first joined the insurer in 2019 as chief technology officer. Before that, he’d spent close to two decades at Macquarie working across technology, product, operations and strategy in wealth management and banking.

“The board welcomes David in the role… With a strong track record in technology-enabled transformation, David brings the strategic execution capabilities needed to deliver modern, customer-first experiences in protection and retirement markets,” Allianz Australia Life chair David Plumb said.

CBA Australian economics lead exits

Gareth Aird 02 has stepped down from the role.

Aird was with CBA for 13 years, joining the bank in November 2012 as a senior economist before taking on the head of Australian economics role in April 2020.

“After 13 rewarding and fulfilling years at Commonwealth Bank, it is time for something new. There are three things from my time at CBA that I am most grateful for: working with a bunch of good people in both research and across the bank and making lifelong friendships; forming fantastic relationships across a range of the bank’s customers; and having the opportunity to lead the team that forecast the path of the Aussie economy and the outlook for the RBA,” Aird said.

“A big thanks to all the great people who played a supportive role in my career at Commonwealth Bank – too many to name, but you know who you are.”

AIA Australia hires chief risk officer

Susan Looi has been appointed to the role, bringing more than 25 years’ experience to the fold.

She was most recently at ANZ where she was general manager, enterprise risk for five years to December 2023. She initially joined ANZ in 2012, first at ANZ Wealth and then E*TRADE.

She’s also previously worked at the Reinsurance Group of America and Zurich Insurance Group.

“I’m delighted to have Susan Looi join the AIA Australia family as our new chief risk officer. Susan plays a pivotal role in safeguarding our risks and empowers her teams to make a positive difference,” AIA Australia chief executive Damien Mu said.

“With her valued knowledge and expertise, Susan will provide critical support and leadership, as we pursue our vision for Australia to be the healthiest and best protected nation in the world.”

Australian Ethical promotes pair

The ethical investment manager promoted two executives to steer growth across its superannuation and investment management businesses.

Maria Loyez03 has become the group executive of superannuation, while chief investment officer Ludovic Theau will take on the additional title of group executive of investment management.

As group executive of superannuation, Loyez will lead the strategic growth of Australian Ethical’s super fund through competitive, innovative, and member-centric products and services, the ASXlisted group said.

Loyez brings over 25 years’ experience and has been chief customer officer since 2020. She previously held senior roles at AMP, SocietyOne, Optus and Volt bank.

Her appointment reflects the company’s commitment to strengthening its foundational superannuation offering, Australian Ethical said.

Meanwhile, Theau will lead the investment management business offering managed funds through financial advisers and private wealth firms as group executive of investment management and chief investment officer.

La Trobe names distribution lead

James Waterworth 04 brings over 20 years of experience in investment management and client distribution strategy to the role.

He joins La Trobe Financial from BlackRock Australia, where he spent eight years, most recently as head of intermediary distribution.

Waterworth has also worked for Société Générale and UBS with their exchange-traded funds and equity derivatives, respectively.

La Trobe called the appointment “opportune,” given its recent launch of the La Trobe Private Credit Fund and record inflows and deployments across its suite of alternative strategies.

The asset manager’s investment chief Chris Paton said Waterworth brings a rare combination of strategic insight and hands-on experience to the business.

Elston expands institutional reach

The asset management has hired a former BlackRock senior manager to help lead its push into the institutional market.

In her new role, Stacey Sinclair will focus on building the institutional presence of the business and supporting the continued growth of its Australian equities and multi-asset investment solutions.

Sinclair brings with her more than 18 years of experience at BlackRock, including the past 12 years as a senior institutional manager.

During that time, she worked closely with a wide range of institutional investors, including sovereign wealth funds, pension funds, insurance groups, official institutions and family offices.

Elston head of adviser services Mark Smith said the timing of the appointment reflects the momentum behind the business.

New global leads for BNP Paribas

Following the completion of BNP Paribas’ acquisition of AXA Investment Managers’ (AXA IM) on July 1, BNP Paribas Asset Management (BNPP AM) named two new global heads for the combined alternatives business.

Isabelle Scemama will lead the combined alternatives capabilities, across AXA IM Alts, AXA IM Prime, BNPP REIM and BNPP AM’s Private Assets, in addition to her current role as global head of AXA IM Alts.

The combined structure brings together over $533 billion (€300bn) in alternatives AUM, across real estate, infrastructure, private debt and alternative credit, and private equity, establishing the largest alternatives investment management platform in Europe.

In addition, Rob Gambi has been appointed to lead the combined liquid investment capabilities, across AXA IM Core and BNPP AM, in addition to his current role as global head of investments at BNPP AM. fs

01: Adrian Stewart

02: Gareth Aird

03: Maria Loyez

04: James Waterworth

Custodians are stepping up as regulators target super funds’ $3.5 trillion private asset rush. Elizabeth Fry writes.

APrivate markets |

ustralia’s super funds face mounting scrutiny over their rapid shift into private markets, as concerns grow about transparency, valuations and liquidity in a sector now absorbing more than 70 cents of every new dollar flowing into pensions.

The surge into unlisted assets—from limited partnerships to direct ownership of airports, bridges and water rights—has been fuelled by limited opportunities in public markets and the long-term investment horizons of funds flush with compulsory contributions.

The numbers are staggering. Private market assets have grown about 20% annually since 2018, according to S&P Global, and that momentum shows little sign of slowing.

And regulators are taking notice.

APRA’s thematic review of trustees’ implementation of Prudential Standard SPS 530 Investment Governance, released in December 2024, marked a turning point. After examining 23 different super funds, the regulator found only three met its expectations for sound valuation practices. ASIC recently followed with a discussion paper raising red flags around valuation practices, liquidity and transparency—especially during market volatility.

The subtext is clear: when nearly $1.2 trillion of retirement savings sits in assets that don’t trade daily, don’t settle, and don’t behave like anything on the ASX, someone needs to be paying closer attention.

“ASIC is interested in the accuracy and transparency of underlying investments,” State Street country head, Australia Tim Helyar01 says.

“Do funds really have full transparency into what they’re buying?”

At the heart of the regulatory concern lies a fundamental problem: unlike ASX-listed shares, which reprice by the second, private assets may only be revalued quarterly, semi-annually, or even annually. This creates “valuation lag”—a gap between what an asset is worth and what it’s recorded as being worth.

That delay distorts what superannuation members see in their balances and complicates unit pricing.

“We’ve just lived through one of the most volatile periods in financial markets,” Helyar notes.

“How many private equity or private debt investments do super funds have that have probably fluctuated wildly in Q2 yet carried stale valuations for extended period?”

The answer worries fund managers, super funds and regulators alike. Can valuation practices, built for stable times, withstand a world of heightened volatility and fast-moving shocks?

Further, perhaps the most troubling issue is who is doing the valuing.

In most cases, the managers earning fees on these assets are also the ones deciding what they’re worth. It’s like asking a real estate agent to value their own house—not necessarily wrong, but far from objective.

01: Tim Helyar country head, Australia State Street

When managers mark their own books, the temptation—intentional or not—is to smooth volatility.

While some super funds have introduced valuation committees or hired independent experts, these checks are typically periodic and not always designed to challenge tens of thousands of discrete investments.

“They value the assets the way they believe they should be valued as per the policy,” adds Helyar.

“There are underlying mechanics, but at the end of the day, somebody’s got to have a valuation policy and sign off against that policy which then forms part of the unit price.”

The result is a system still heavily reliant on trust.

When the music stops

The COVID-19 early release scheme created a liquidity event many long-term asset owners hadn’t modelled. What had once been considered a manageable trade-off between return and liquidity suddenly looked fragile.

Valuation lags collided with real-time member redemptions, forcing funds to confront the challenge of liquidating illiquid assets without distorting pricing or harming remaining members.

“How do you make an assessment on liquidity if you’re not completely clear about what’s within the structure and how quickly that can be realised?” Helyar asks.

“If there’s a need to liquidate investments quickly what happens when the music stops? Do investors get 100 cents in the dollar, or not; what happens to confidence across superannuation as a whole?”

The stress test revealed significant infrastructure gaps.

“The experience showed us what happens when market conditions force rapid asset liquidation,” BNP Paribas’ head of securities services, Australia and New Zealand Daniel Cheever02 says, adding that an early release scheme of this magnitude was unlikely to have been foreseen.

Member switching behaviour added additional strain. In falling markets, members tend to switch from growth to defensive options, triggering asset sales that can be difficult in private markets.

Cheever says if this occurs in markets where there isn’t liquidity, that can be challenging for funds to manage. And it can be exacerbated by extreme movements in currency or credit markets. Beyond immediate portfolio management, the broader concern is systemic

“This is about understanding risk principles and stress-testing for the less well-understood investments and what would happen in extreme market conditions,” he says.

A bigger role for custodians

This is where the story takes an interesting turn. Custody banks—long the quiet achievers of the investment world—are being pulled into the foreground as regulators ramp up scrutiny of super funds’ exposure to private markets. With

Feature | Private markets

02: Daniel Cheever head of securities services, ANZ BNP Paribas Securities Services

APRA pushing operational resilience up the supervisory agenda, custodians are stepping into a more visible role in infrastructure, transparency and cross market analytics.

While they don’t originate asset valuations— recording, safekeeping and settling the asset— increasingly, they play in the middle office space as well acting as an extension of the investment management component of the super fund, or the asset manager.

The shift is driven by demand as much as regulation. Today’s larger funds with substantial alternative allocations wield significantly influence, pushing for more frequent valuations and demanding better data from asset managers.

According to Leon Stavrou 03 , Northern Trust’s head of Australia and New Zealand, custodians need to be able to “react quickly, be nimble in how they react to change.”

What’s different is the pace of change.

“There are just more issues now. We’ve always had to adapt, but now the number of fronts we’re adapting on has increased—regulation, market shifts, client needs—it’s all accelerating at once,” Stavrou explains.

That shift includes deeper engagement with portfolio-level analytics.

It’s not just about servicing individual assets - it’s about helping funds see the whole picture, says Cheever.

“Each asset class has its own complexities, and we focus on bringing them all together to give super funds a full portfolio view. That helps clients assess their risk exposures, model potential crisis scenarios, and understand where the vulnerabilities lie,” he says.

At a very basic level, custodians typically analyse the statements that come in before agreeing with clients on a valuation adjustment process for the interim.

The toughest calls often arise in these inbetween periods. Market conditions might indicate an adjustment is coming, but valuation policies and triggers remain unclear.

“There isn’t a clear answer, so you’re making a decision on imperfect information. That’s really the challenge,” Stavrou concedes.

Proxy pricing has a role. Interim pricing policies are being built to capture market or currency movements between formal revaluations—essential for assets priced quarterly but unit-priced daily. Proxies can’t replace formal valuations, but they can provide much more current interim pricing that reflects what’s happening in markets.

“Say you’ve got a trust with four or five underlying assets in different currencies but the trust prices quarterly in Australian dollars. So, you capture that exchange variance in the interim,” he says.

But even the best systems have their limits.

“There’s always going to be a disconnect between the valuation cycle of the of illiquid assets and what you provide members to transact on,” he argues.

“The closer you can get, the better—but I don’t think you’re ever going to get all the way there.”

03: Leon Stavrou head of Australia and New Zealand Northern Trust

A lot of funds are judged by their relative performance to other funds, and if there are different valuation principles across the different funds, then it’s not a level playing field.

Daniel Cheever

In response, Northern Trust’s strategy focuses on identifying gaps and consolidating fragmented data while building value around what can be known.

Artificial intelligence is starting to shift the picture, though it won’t solve the fundamental independence problem. But it’s becoming a powerful tool for flagging trends, building proxies, and spotting revaluation triggers early.

“You might have parts of your portfolio that are illiquid or infrequently valued. But you can correlate with broader data—public markets, economic indicators—to get ahead of revaluation triggers,” Stavrou explains.

From where he sits, the real opportunity lies in joining the dots between public and private markets. Private and public companies in the same industry behave similarly, creating compelling logic for applying public market indicators to private asset pricing.

“If a listed company delists, it’s still the same business—it’s just not on an exchange,” he observes.

The reality check

David Travers04 , head of the Australian Custodial Services Association (ACSA), agrees custodians have a greater role to play—mainly because they’re the “source of truth” for fund accounting data.

“They’ve got all that data, and there’s more they can do to feed insights back to their client base,” he says.

That’s where AI starts to come into play— helping custodians become more efficient, more responsive, and possibly leading to new service offerings.

But Travers says while AI might enable better proxies—faster currency impact detection, quicker correlations between public and private markets, more frequent valuation alerts— they remain just proxies. Private asset values still come directly from fund managers to custodians—a process APRA has already flagged for its lack of independence.

The fundamental problem persists; custodians don’t control the valuation source.

“Even AI won’t help custodians get a source of value, which means fund managers are still marking their own homework,” Travers says.

He says custodians would need an independent party to provide valuations. Once that data exists, custodians can use it to support funds— but they wouldn’t create it themselves.

And once that valuation is public—especially

if more than one investor is involved—he believes the data should be easier to access than it is today.

He draws comparisons to public markets.

“Organisations like Bloomberg and Reuters produce data, which custodians purchase for pricing public market assets. But historically, there’s been no equivalent for private markets,” he notes.

When custodians talk about pooling data across clients, someone still needs to build a reliable feed for private market valuations—and no one knows who that will be.

“What the custodians are implying is that to combine this data, you need a Bloomberg, Reuters, or someone similar to capture all the private investment valuation data,” Travers explains.

The missing infrastructure

What has changed is that technology now allows firms to consolidate and aggregate data in revolutionary ways. In practice, custodians are becoming integrators—joining fragmented data sources and linking public and private market signals.

J.P. Morgan has been using AI for over a decade, mainly for fraud detection and operations. But now, it’s applying the technology far more extensively across its business.

“We’re very passionate about AI and see it as playing a critical role in providing faster and better results for both our business and our clients,” says Nadia Schiavon 05 , J.P. Morgan’s head of securities services for Australia and New Zealand.

“The investment we’re making reflects our belief that AI is integral to risk management, decision-making, and providing comprehensive real-time insights.”

This technology is particularly valuable for private assets, which generate torrents of unstructured data—PDFs, spreadsheets, and scanned documents locked in formats that traditionally required manual processing.

AI has automated this process, extracting data regardless of format and feeding it directly into pricing systems, cutting bottlenecks and enabling near real-time processing.

“We’re agile enough to price on client demand. If clients request monthly, weekly, or even daily pricing, we have processes that can facilitate that,” explains Schiavon.

“During market volatility, several clients reached out with urgent requests, some contacting us over the weekend needing assets priced by Monday morning—and we were able to deliver.”

Benchmarking wilderness

This automation serves a larger purpose. Schiavon explains that J.P. Morgan is trying to plug a critical gap: the absence of reliable performance benchmarks.

“Our goal is to leverage this technology to provide benchmarks and insights previously unavailable,” she says.

Unlike listed equities, which benefit from widely accepted indices like the ASX 200, private markets remain a benchmarking wilderness. Relative performance is everything in super.

“A lot of funds are judged by their relative performance to other funds, and if there are different valuation principles across the different funds, then it’s not a level playing field,” notes Cheever. It’s been a big focus for ASIC.

That lack of comparability affects more than fairness—it directly impacts accountability and transparency. Without consistent benchmarks, funds are flying blind. It becomes difficult to as-

04: David Travers chief executive Australian Custodial Services Association

US mid-market buyouts in rising rate cycles, or European distressed debt post-pandemic.

Instead of relying solely on manager-provided valuations, custodians can cross-reference data against similar assets, market conditions, and performance patterns to verify or challenge those numbers.

Schiavon’s goal jibes with the other big custody banks. Nothing is as exciting as the prospect of developing performance benchmarks and therefore valuation benchmarks for each of those different asset types or asset classes.

Imagine being able to see how your infrastructure portfolio fund stacks up—not six months late, but right now. That’s the kind of transparency that could actually help super fund members understand whether their money is working effectively. No more black box guessing about whether fund managers earn their fees.

AI can crunch vastly bigger datasets than any

Even AI won’t help custodians get a source of value, which means fund managers are still marking their own homework.

David Travers

sess whether a 2% management fee and a 20% performance fee are justified.

Current benchmarks are woeful. They’re often based on limited datasets from specialist vendors and lag actual performance by quarters or even years. Some are so broad they’re meaningless – lumping together everything from Aussie infrastructure to Silicon Valley venture capital under alternatives. Others are too narrow to provide statistical value, built on small pools of data that may not represent market reality.

The AI advantage

The beauty of AI-powered benchmarks is it can create very specific benchmarks. Rather than

analyst could handle, identifying market opportunities and investment patterns that would be invisible to traditional approaches.

“It’s not just about making existing processes faster – it’s about seeing things that were literally impossible to see before,” adds Helyar.

Recent market volatility has demonstrated AI’s analytical advantages with striking clarity.

Helyar notes: “Take the strange moves in US Treasury yields during the recent geopolitical flare-ups in the second quarter – they didn’t behave the way they historically did in times of turmoil.”

In his view, AI systems with broader analytical scope might have picked up opportunities that traditional analyst completely missed.

Private markets | Feature

Nadia Schiavon head of securities services, Australia and New Zealand J.P. Morgan

mean for the super funds’ unique circumstances and objectives.

Asset consultants like Frontier Advisors may have access to vast troves of data, but they use it as a starting point to ask questions rather than to answer definitively what the outcome is.

Director of sector research Paul Newfield 06 cites the example of 50 property managers with Melbourne office properties, where one wrote down assets by 5% over six months. On the surface, historical data might suggest others should follow, but the reality is more nuanced—that manager might have premium assets, while others have lower ratings, shorter lease terms, and higher gearing.

If all managers move in one direction and one doesn’t, Newfield goes on to say, it doesn’t mean that manager is right or wrong. The outlier could be behind the curve or could have different assets or better-quality holdings.

“The point is with data, you don’t look for causality—you just look for what others have done,” he says.

Asset consultants flip that logic, asking: why is it different? Is it reasonable that it’s different? They look for causality rather than correlation, understanding that the story behind the numbers is often more important than the numbers themselves.

Still, he remains optimistic.

Newfield sees exponential growth in super funds’ valuation focus and resources.

Funds are increasingly separating investment decisions from valuation decisions, staffing valuation committees with people who have rich experience. Instead of accepting that the manager’s valuation must be true, they now question the underlying process and whether it differs from other managers, interest rate directions, or their own expectations.

“That kind of rigour is crucial in Australia, which has the only pension system of its scale where members can easily switch funds—and one of the highest allocations to private markets,” he says.

Regulators are identifying good practices and pushing them industry-wide. While intense focus on valuations will continue, Newfield believes the industry will likely reach a point where everyone has lifted their game to a reasonable standard. fs

05:

06: Paul Newfield director of sector research Frontier Advisors

Dexus rebuilds DWSF

Dexus has added a significant asset to the Dexus Wholesale Shopping Centre Fund with a $683 million investment.

The Dexus Wholesale Shopping Centre Fund (DWSF) exchanged contracts with Scentre Group to acquire a 25% stake in Westfield Chermside, Brisbane, for $683 million.

This fresh investment comes after Dexus Funds Management launched court action against AMP and Collimate Capital in relation to the forced sale of its interest in the Macquarie Centre, which was valued at around $830 million and was one of DWSF’s major assets.

In December 2024, Dexus flagged that it would appeal the decision after the Supreme Court of NSW ruled that Cbus and UniSuper, the co-owners of Macquarie Centre, could force Dexus to sell its stake.

Dexus said this new investment aligns with DWSF’s strategy of owning market-leading retail assets with strong growth potential.

Dexus will invest an additional $170 million into DWSF, taking its investment to $300 million.

Dexus said it would also support further initiatives to ensure the fund maintains investor appeal and performance, including changes to the fee structure, fund liquidity and backstop funding in relation to the sale of the Macquarie Centre.

“This exclusive off-market transaction leverages our established relationship with Scentre Group to secure a market-leading asset for DWSF. Dexus’s co-investment underscores its conviction in the fund’s strategy and future potential,” Dexus executive general manager, funds management Michael Sheffield said. fs

Hostplus shuts two options

Hostplus said it plans to shutter two investment options, effective September 30.

The $128 billion super fund will close the International Shares – Emerging Markets and the International Shares (Hedged) – Indexed options.

Hostplus said it is closing the options due to lack of member demand.

“We regularly review our investment options to make sure they’re working in our members’ best interests. A recent review showed that member take-up for these two options has been low and the alternate options share many of the same characteristics as the options being closed,” Hostplus said.

“Closing these options will help us manage overall costs for our members and will simplify the range of products members can choose from.”

Members who still hold those options will see their investments move into alternate, similar options.

Those in the International Shares – Emerging Markets option will be moved to the International Shares option. Those in the International Shares (Hedged) – Indexed option will be moved into the International Shares – Indexed option.

“These alternate options offer the closest match to the closing options, with similar characteristics such as investment objectives, investment fees and costs, asset class exposure, level of investment risk and minimum suggested investment time frame,” Hostplus said. fs

01: Stephen Darke chief executive Navigator Global Investments

Alternatives stable pushes Navigator assets higher

Karren Vergara

Ongoing volatility continues to bolster Navigator Global Investments’ (NGI) performance as its stable of active, alternative strategies saw assets under management (AUM) jump to US$86 billion at the end of June.

While the global fundraising landscape remained challenging through the first six months of 2025, particularly for high-conviction capital allocation by institutional investors, the ASXlisted fund manager reported inflows into hedge funds and private markets strategies.

It’s very important to have a portfolio that actually exhibits that form of lack of correlation.

NGI Strategic Private Markets’ strategy, for example, rose 14% in the quarter to June with inflows expected to continue, while total AUM growth was 15% annually.

NGI chief executive Stephen Darke 01 told Financial Standard that the current investment climate has many tailwinds for the alternative asset class, namely from increased volatility, strong interest in alternatives from investors, ranging from high-net-worths to institutions, and its non-correlation with mainstream assets like equities and bonds.

“We deliberately and continually look at the diversification of our underlying strategies and compare them both to the markets and to each other. We do a correlation analysis, which shows, with very few exceptions, that that our liquid hedge fund managers are not only uncor-

related, largely to the markets, meaning equities and debt and fixed income, but also to each other,” he explained.

“That’s very important, because that increases the resiliency and consistency of our performance fees and our investment performance, and generally the overall portfolio and how it holds up in moments of stress.

“At the moment, we have some strategies performing extremely well, like our quantitative strategies and our macro strategies and others that may not be doing as well because their investment climate was perhaps more akin to last year or the year before. It’s very important to have a portfolio that actually exhibits that form of lack of correlation.”

NGI has 12 partner firms, the majority of which are based in the US.

In searching for the right partners, Darke said they must have an “investment edge” as it is not just about track record.

“They have a very clear perceived advantage in what they do for a living, whether it’s investing in infrastructure debt or healthcare private equity. We do look to ensure that that edge exists, that it has been reflected in their performance, that it’s sustainable going forward, and that we believe investors are going to want to continue to allocate, in an accelerated fashion capital to that manager,” he said. fs

Australian Ethical FUM grows 34%

Eliza Bavin

Australian Ethical reported strong quarterly net flows and investment performance in Q4 of FY25, contributing to full-year FUM growth of 34%.

Australian Ethical chief executive John McMurdo said the strong growth reflected Australian Ethical’s disciplined execution of its strategy and the resilience of its ethical investment approach.

“The continued demand for our way of investing has delivered record super net flows of $209m in the quarter,” McMurdo said.

“Our investment performance has also contributed to strong FUM growth, and I’m thrilled that we have been able to reward investors with strong returns during this period. Together, this further demonstrates that ethical investing can deliver great outcomes while making money a force for good.”

Australian Ethical reported Q4 retail and wholesale net flows of $195 million, which it said

were primarily attributable to superannuation which was boosted by record year-end voluntary contributions and the resumption of marketing campaigns following the funds administration transition from Mercer to GROW Inc in the first half of the financial year.

Further, Australian Ethical said the number of new members consolidating their super balances increased after enhancements to the joining process, while Superannuation Guarantee contributions continued to underpin stable ongoing positive net flows.

Meantime, Australian Ethical recorded positive Q4 institutional net flows of $61 million from its fixed income funds and mandates following the acquisition of Altius Asset Management early in FY25.

The investment manager said it was also beginning to secure new clients within its relatively new institutional channel. fs

The quote

Padua Solutions buys Wealth Data

Matthew Wai

Padua Solutions is strengthening its data capabilities with the acquisition of Wealth Data following a successful capital raise, which closed at $2 million over its target.

Wealth Data provides insights on advisers, superannuation funds, and SMSFs.

Following the acquisition, Padua Solutions will receive enhanced wealth insights to enable more effective adviser support and client engagement, improved market intelligence to enhance advisers’ decision-making and competitive advantage, and immediate client benefits by leveraging Wealth Data’s existing relationships across platforms and institutions.

Wealth Data founder Colin Williams said he is pleased to join Padua Solutions.

“Joining Padua presents an exciting opportunity to further enhance how our data insights drive positive outcomes in financial advice and financial services,” Williams said.

“Together, we will continue innovating to deliver unparalleled value and insights to the industry.”

Padua Solutions co-founder and chief executive Matthew Esler said the acquisition marks a significant step towards delivering “powerful and actionable” insights to the financial services industry.

“Colin Williams and his expertise will significantly enhance our offering and our ability to support our clients’ growth and success,” Esler said.

“The strong response to our capital raise reflects confidence in our strategic vision, and we look forward to announcing additional acquisitions soon.” fs

Rainmaker Mandate top 20

We are in

The quote

CSC awards sustainable credit mandate

Jamie Williamson

Commonwealth Superannuation Corporation

(CSC) is the seed investor in two new sustainable credit funds from UK-based manager Osmosis Investment Management.

The fund manager has launched the Osmosis Global Credit UCITS Fund and the Osmosis Global High Yield UCITS Fund, its first fixed income offerings.

CSC has committed $533 million (€300m) across both funds as cornerstone investor.

The funds are managed by the newly launched Netherlands-based affiliate, Osmosis Investment Management NL B.V., which was spun out of Robeco and is led by Robeco’s former chief investment officer Victor Verberk and other key members of the team, including portfolio manager Peter Kwaak.

“We are in the business of building, supporting and growing deeply talented and future-fit asset managers, like Osmosis NL, that bring innovative investment solutions to life. We look

for market-leadership via thoughtful value propositions, crispness of purpose, and, most importantly, agile risk-management,” CSC chief investment officer Alison Tarditi 01 said.

“Osmosis NL demonstrates these characteristics. We believe this will enable them to manufacture the dependable net return streams our customers need.”

Meanwhile, Verberk said partnering with CSC marks an exciting milestone for the new business.

“… and reflects the culmination of months of intense preparation and hard work. We spent as much effort on the operational quality as on the investment quality of our services,” he said.

“Being fully operational and managing capital so soon after receiving AFM approval in April is a remarkable achievement. It’s a testament to the dedication of our team and the strong support of our institutional shareholders, which has allowed us to hit the ground running.” fs

Section 899 ditched but companies face tax uncertainties

While Australian investors breathed a resounding sigh of relief when US President Donald Trump binned section 899 of the One Big Beautiful Bill Act (OBBBA), local multinationals, however, were lumped with grave uncertainties surrounding the global Pillar 2 tax regime. Karren Vergara reports.

Australian investors, particularly superannuation funds, lunged into cartwheels upon the exclusion of section 899 in the OBBBA, which was cemented into law on July 4.

SW Accountants & Advisors associate director of tax Antony Cheung 01 said the removal of section 899 was welcomed by Australian groups that invest and conduct business in the US.

“This is particularly relevant for superannuation funds taxed at 15% in Australia, where the additional US tax could not be credited and would have directly and immediately impacted investment returns,” he said.

Section 899 would have affected long-term investments and confidence in investing in the US because of all the uncertainty, Cheung told Financial Standard

“That may also lead to a change in investment strategy. For example, there may be a preference for high-growth stocks or stocks

undertaking share buybacks as compared to dividend-paying stocks as dividends will be subject to these tax changes,” he said.

There are now lingering issues post-carveout. These are namely the conditions behind the deal that forged the exclusion of section 899 that sits within the Pillar 2 tax – a proponent of the OECD/G20 Two-Pillar Solution for multinational businesses.

On June 27, US Treasury Secretary Scott Bessent said on social media platform X (previously Twitter):

After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests. OECD Pillar 2 taxes will not apply to US companies, and we will work cooperatively to implement this agreement across the

How would the US entity exclusion play out at the global and Australian domestic level, and will there be roll-back of the legislation, given the intention of these laws is predominantly to target US multinationals?

SW Accountants & Advisors

OECD-G20 Inclusive Framework in coming weeks and months.

I want to thank my G7 counterparts for their partnership and collaboration towards achieving this historic outcome.

Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill. This understanding with our G7 partners provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond.

I thank Senator Crapo and Chairman Smith for their leadership that made this day possible.

Lobbying on behalf of concerned superannuation funds and instructional investors, Treasurer Jim Chalmers commanded Bessent’s urgent attention prior to the OBBBA passing.

Chalmers confirmed he shared many concerns of investors and described the conversation, which discussed a range of issues facing Australia, including tariffs and Trump’s tax bill, as “very productive”.

“We were able to cover a whole range of issues. The critical minerals market around the world, some of the challenging tax issues including some issues before the US Congress and also, of course, I made our case once again when it comes to trade and tariffs and these escalating trade tensions around the world,” Chalmers said.

“The global economic environment is very uncertain, very unpredictable and very volatile. The conflict in the Middle East is part of the story but not the whole story.

"Eastern Europe, the slow down or a weakness in the Chinese economy but also the implications for global demand and global inflation from these escalating trade tensionsthese are all the very difficult issues that we are trying to navigate together.”

Overlooked

Also known as the Global Anti-Base Erosion Model Rules, Pillar 2 attempts to ensure that large multinationals pay a minimum level of tax on the income arising in each of the jurisdictions where they operate.

It means that Australian-headquartered multinationals and foreign multinationals operating in Australia are not out of the woods yet.

In negotiations, G7 nations – which excludes Australia – comprising the UK, US, Canada, France, Germany, Italy and Japan, convinced US policymakers to ditch section 899 at the last hour.

The sweetheart deal meant that the exclusion of the US from sections of the OECD/G20 TwoPillar Solution, which effectively slaps a global minimum corporate tax rate of 15% for large multinationals in the jurisdictions they operate.

In a statement dated June 28, the G7 said the “side-by-side solution” means that US-parented groups would be exempt from the Income Inclusion Rule (IIR) and Undertaxed Profits Rule (UTPR) in recognition of the existing US minimum tax rules to which they are subject.

The UTPR enables a country to increase taxes on a business if it is part of a larger company that pays less than the proposed global minimum tax of 15% in another jurisdiction.

The IIR requires a parent entity of multinationals to pay a top-up tax if such subsidiaries are taxed below the 15% minimum in their respective jurisdictions.

Cheung pointed out that the Australian domestic minimum tax and IIR, and UTPR affect income years commencing 1 January 2024 and 2025 respectively – yet many practical issues remain unsolved.

Interestingly, given this is a G7 agreement, Cheung asks if it would be approved under the broader OECD inclusive framework representing more than 140 countries?

01: Antony Cheung associate director of tax

SW Accountants & Advisors

Furthermore, SW Accountants & Advisors lists several burning questions in a note to clients.

“How would the US entity exclusion play out at the global and Australian domestic level, and will there be roll-back of the legislation, given the intention of these laws is predominantly to target US multinationals?” the Melbourne-based accounting firm writes.

“What is the adverse impact on Australian multinationals since the exclusion provides a structural tax advantage to US multinationals?”

Furthermore, would there be any side deals between Australia and other jurisdictions?

Cheung also questioned how the Commissioner (and the ATO) would administer the law in the interim while negotiations take place, given that a full year has passed since the legislation came into effect?

The G7 said the delivery of a “side-byside system will facilitate further progress to stabilise the international tax system, including a constructive dialogue on the taxation of the digital economy and on preserving the tax sovereignty of all countries.”

While the G7 recognises that these issues have relevance to a wider group of jurisdictions, the countries said they “look forward to discussing and developing this understanding, and the principles upon which it is based, within the Inclusive Framework with a view to expeditiously reaching a solution that is acceptable and implementable to all.”

Wait-and-see approach

At the height of tariff threats and geopolitical mayhem, management teams had to deal with the uncertainty of section 899, said ECP Asset Management portfolio manager Annabelle Miller02 , who specialises in analysing global companies.

In essence, the perfect storm led to a structural shift in the way investors are thinking about allocating to markets and therefore countries, she said, foreseeing that European equities would be likely benefit from the frenzy.

“What we’ve seen since the GFC is European investor allocations to the US rising from 15% in 2009 to 45% at the end of 2024,” she said, adding that if section 899 went ahead it would have been another catalyst for investors to shift back to their domestic markets.

“When we look at businesses, we try and allocate capital towards ones with highest quality, where they have business models that can navigate markets like this. Whether that’s rising tariffs or taxes – companies that have a true, sustainable competitive advantage can actually pass increases on to their customers without much impact to volume,” she said.

What helped Dan Farmer03 , chief investment officer of MLC Asset Management, was going back to learnings from Trump’s first four years in office.

“We went back on the files and thought: how did we react to Trump and his administration in his first term?” he said.

02: Annabelle Miller portfolio manager ECP Asset Management

03:

We landed on this idea of, with the Trump administration, [it’s better to] react to what they do, not necessarily what they say.

Dan Farmer

“We landed on this idea of, with the Trump administration, [it’s better to] react to what they do, not necessarily what they say. There’s a lot of headlines, noise, and statements made, which can change [quickly].”

The investment team thinks that’s part and parcel of the administration’s tactics and such tactics typically involve a “punch in the nose and then coming back to reconcile.”

“We look through that and do what I call ‘aggressive rebalance of equity markets’, meaning when the equity market fell [upon the shock tariff headlines] we were buying equities to make sure we’re getting back benchmark weight. And then that held the fund in good stead and importantly, provide [that FY25] return,” Farmer said.

Miller added: “You cannot let the market change your investment thesis based on factors that might or might not be transitory. Ultimately, you want to focus on businesses that have the ability to grow their earnings over time, irrespective of whether interest rates are rising or falling, oil prices are rising or falling, or what Trump’s policy moves are going to be in the next month.”

“The extent that the geopolitical or policy impact markets, it provides us with a great opportunity to pick up more exposure to these businesses over time. fs

Dan Farmer chief investment officer MLC Asset Management

Managed Funds

Data mastery: How practices can unlock growth and know their client

Stu Alsop, director of sales, Intelliflo Australia

M ost financial advisers enter the profession to try and make their clients’ lives better, including helping them to reach their goals and to prepare for a happy retirement. While advisers are often good with numbers too, few would say they become an adviser to deal with data.

However, as businesses grow and client books expand, data becomes a fundamental ingredient for both today and tomorrow. For forward-thinking practices, it can unlock new business opportunities, allow advisers to be more strategic and targeted, can help prepare a firm for sale and can prove to clients advisers truly know them.

On the other hand, having data gaps or poor data quality can make an advice business look unprofessional and create administrative headaches when it comes time to audit the business, sell it or market to a new segment.

The data dilemma

In my experience, many Australian advice practices don’t realise the potential of the data sitting within their systems. A wealth of powerful data is there, but practices aren’t capturing it and deploying it effectively, despite spending hours tabulating it. It was a theme that

was covered in our whitepaper Advice, Evolved, best summed up by ensombl chief executive Clayton Daniel.

“No-one – or very few companies – have mastery of their data. It’s pandemonium out there and it’s why some of these financial services companies have existed for such a long time. They have created this Jenga tower of data that can fall over at any time, and often does,” he said.

Several other industries and professions, from consulting to law to accounting, see their data as a key asset to differentiate their business and prove their worth. Unfortunately, we are yet to see this in the advice profession, but I have faith that will change as the functionality of data-harnessing technology systems becomes more apparent.

Know your client: game-changing insights

Historically, practices have understandably been afraid of pouring time and resources into untangling a mess of legacy data, at the cost of valuable time with their clients. Fortunately, new technology has helped somewhat on this front, but technology still relies on quality data and advisers actively engaging with their own data. For businesses who want to scale up and offer more targeted advice, investing in the process of cleaning up data is essential. Too often, I still see advisers spending a

significant amount of time manually gathering data to give them a snapshot of their business, including clients’ age range, FUM and asset mix, fees, revenue from planning and insurance and top 10 client families. The manual process involves searching, downloading reports and compiling spreadsheets, when technology can automate this process and deliver insights instantly. If data is clean, tools such as business intelligence (BI) dashboards can turn raw and undigestible pieces of information into visually appealing, bite-sized insights that can quickly tell an adviser essential information about their clients. These insights allow advisers to segment their client base more effectively and uncover new opportunities to personalise advice and grow their business.

Preparing for M&A

As we start the new financial year, there’s a flurry of M&A activity happening. Once again, data is a practice’s best friend when it comes to M&A. Today’s acquiring firms are looking at more than a practice’s profit and loss; they want an inside view of the practice’s client base and their demographics, the firm’s key strengths, its

and its history of growth. Data is

of those

and preparing

Workplace Super Products

QIC sells to La Caisse

Canadian pension fund La Caisse will acquire a stake in the QIC-backed Renewa, a renewable energy land financing company located in the US, for US$200 million ($307m).

QIC acquired 100% ownership of Renewa in 2022.

Texas-based Renewa operates as a platform providing long-term capital solutions to landowners and renewable energy project developers. Its portfolio comprises more than 75 operators across 30 states in the US, expanding from just 16 in four states just over three years ago.

According to estimates, more than 20 million acres of land in the US will be needed to accommodate the solar, wind, and energy storage facilities to modernise the nation’s energy infrastructure and enhance energy independence, QIC said, presenting surging potential for the sector.

Renewa currently owns land or holds a ground lease for more than 140 major clean energy assets, with these projects representing about 26 giga watts (GW) of renewable energy.

It has grown substantially since QIC’s acquisition, now supporting renowned renewable developers Acciona Energy North America, AES, Deriva Energy, Enbridge, Enel Green Power North America, Invenergy, Lightsource bp, Pattern Energy, SB Energy, Strata Clean Energy, Swift Current Energy, and Total Energies.

La Caisse’s commitment brings total secured funding to US$750 million ($1.1bn) since Renewa’s inception, QIC added. fs

UK ditches Green Taxonomy

The UK government has abandoned the Green Taxonomy as it believes it “would not be the most effective tool to deliver the green transition” and should not be part of the sustainable finance framework.

“Whilst the government’s ambitions to continue as a global leader remain unchanged the consultation responses showed that other policies were of higher priority to accelerate investment into the transition to net zero and limit greenwashing,” HM Treasury said.

The government said it continues to work in partnership with industry to deliver on plans to “make the UK a global hub for green and transition finance activity” based on the recently published consultations on the UK Sustainability Reporting Standards (UK SRS), assurance sustainability reporting, and how best to take forward the manifesto commitment on the development and implementation of transition plans that align with the 1.5°C goal of the Paris Agreement.

HM Treasury argued in its report that the aim of developing a taxonomy for sustainable activities is to facilitate an increase in sustainable investment, and/ or to reduce greenwashing, including by providing a reference point for other policies.

It differs from other sustainability initiatives in that it is predominantly designed to apply at the level of economic activities, providing users with information about individual activities and processes.

“The government is aware that taxonomies can be complex to design and implement in practice, and that feedback on their value is mixed,” the report read. fs

01: Larry Fink chief executive BlackRock

BlackRock sets new AUM record in June

Karren Vergara

BlackRock’s assets under management have ballooned to a record US$12.5 trillion in June, jumping 18% over the last 12 months.

BlackRock chief executive Larry Fink 01 said the fund manager’s sustained growth has been powered by its whole portfolio approach, “being the first firm to bring together active and index at scale”.

The quote

And we’re attracting a new and increasingly global generation of investors...

“And now we’re building on our foundational platform to redefine the whole portfolio once again by integrating public and private markets across asset management and technology,” he said.

Some 42% of total AUM sit in the iShares ETF business. About 27% of it comes from institutional investors and 24% from retail investors.

About US$152 billion of year-to-date total net inflows was led by iShares ETFs, alongside private markets and cash net inflows.

“iShares ETFs had a record first half in flows, and technology annual contract value (ACV) growth reached a fresh high of 16%.

This core strength, alongside client demand for private markets, digital assets, Aperio, and our tech and data-driven systematic strategies, propelled another consecutive quarter of

above-target organic base fee growth and record AUM of US$12.5 trillion,” he said.

The group’s revenue grew 13% year-overyear to US$5.4 billion, reflecting positive impact of the markets, organic base fee growth and fees related to the Global Infrastructure Partners (GIP) acquisition, as well as higher technology services and subscription revenue, partially offset by lower performance fees.

“We surpassed the fundraising target for GIP’s fifth flagship, raising US$25.2 billion and delivering the largest-ever client capital raise in a private infrastructure fund. We announced the development of a custom target date fund glidepath that strategically allocates across public and private markets,” Fink said.

“And we’re attracting a new and increasingly global generation of investors through things like our digital assets offerings and recently launched funds in India through our joint venture Jio BlackRock.”

The second largest fund manager, Vanguard, had US$10.2 trillion ($15.7tn) in assets under management globally as at April.

In his annual letter to investors, Fink said assets in the form of data centres, ports, power grids, and fast-growing private companies are the assets that will define the future. fs

Lendlease awarded Malaysian pension fund mandate

Matthew Wai

The $50 billion investment manager was awarded a mandate to look after a flagship initiative by Malaysia’s largest public sector pension fund, Kumpulan Wang Persaraan (KWAP).

With $181 million (RM500m) in committed capital, Lendlease can potentially manage up to $362 million (RM1bn) in real estate assets across Malaysia and Australia for KWAP.

Key sectors of these assets include industrial, logistics, build-to-rent, data centres, healthcare, and education properties.

The mandate also represents a strategic opportunity to support KWAP’s diversification into high-growth real estate segments, while contributing to its national development objectives and strengthening local sectoral capacity, Lendlease said.

The announcement follows that of its $1.2 billion

office mandate for the management of Aurora Place in Sydney, on behalf of existing capital partner National Pension Service of Korea, and the introduction of two new Japanese investment partners, Sotetsu Urban Creates and Yasuda Real Estate, into the Lendlease Moorfields Investment Partnership in London.

Lendlease Investment Management chief executive Justin Gabbani said: “We look forward to partnering with KWAP under this new mandate, which will further strengthen the real estate and investment management markets in Malaysia and Australia.”

“We are focused on providing compelling investment opportunities to support KWAP’s long-term investment objectives, as we continue to grow our network of global capital partners and focus on delivering strong investment outcomes for our investors.” fs

Trump’s tariffs and the RBA

After the RBA surprised economists by leaving interest rates on hold in July, GSFM investment specialist Stephen Miller expects the central bank will have some of its concerns addressed as US President Donald Trump’s tariffs come back into effect.

Miller said the surprise interest rate hold was likely to do with the “lack of any evidence in the hard data” around any substantial activity blowback from US trade policy.

“I think that the inflation picture confronting the RBA might be a little less challenging than that confronting the US Federal Reserve (Fed) and certainly the Bank of England (BoE),” Miller said.

“Australia’s eschewal of retaliatory measures against US tariff impositions will mitigate any inflation fallout.”

Miller added that while productivity growth and elevated labour cost growth may be sticking points for the RBA, he believes there are other data points that suggest the near-term inflation outlook is satisfactory enough to allow for an August rate cut.

“For one thing, the monthly CPI inflation indicators have been benign. For another, the June NAB Business Survey revealed the likelihood of further disinflation,” Miller said.

“It is the case that RBA forecasts now have underlying inflation around the midpoint of the 2-3% range out to mid-2027.” fs

The quote We do not believe this alone is going to be ringing any alarm bells at the RBA.

01: Russel Chesler head of investments and capital markets VanEck

Unemployment data throws ‘curveball’ at RBA

Eliza Bavin

The unemployment rate rose from 4.1% to 4.3% in June, according to data released by the Australian Bureau of Statistics (ABS).

VanEck head of investments and capital markets Russel Chesler 01 said the surprise uptick in unemployment means the next rate cut from the Reserve Bank of Australia (RBA) could be “one and done”.

“We do not believe this alone is going to be ringing any alarm bells at the RBA. It is only one month of data, and with the number of job ads increasing by 1.8% in June 2025 – according to ANZ-Indeed data – there is no clear indication that unemployment will increase further,” Chesler said.

“The market is still pricing in two more rate cuts by the end of the year, but we consider it premature to be making this call before there is any data to support this. We think the RBA’s decision to hold rates this month was the right

move, and based on the current information to hand, we think there could be one more rate cut towards the end of the year.”

Meanwhile, Betashares chief economist David Bassanese said the jobs data was a “slam dunk” for an interest rate cut in August.

“Movements in the unemployment rate tend to be less volatile and so can provide a better underlying read of labour market strength. On that score, the rise in the unemployment rate to 4.3% is disappointing and may suggest the economy is finally losing the ability to find jobs for a labour force still growing strongly at a rate of around 30,000 per month,” Bassanese said.

“Indeed, the growing question market around the resilience of the labour market provides a little more wiggle room for the RBA to cut rates in August even if there’s modest upward inflation surprise in [the] inflation report.” fs

Financial Standard economics and investment

Alternatives

Gold bullion versus Bitcoin

John Dyall

Bitcoin and gold bullion continue their remarkable price rise. The question is whether to finally invest in one or both the assets. They do have similar characteristics. Each is considered a store of wealth, yet neither produces any cashflow.

Bitcoin has clearly been a better investment than gold bullion from a returns perspective. In the seven years to June 2025 Bitcoin produced returns of 50% p.a. while gold bullion has returned 15% p.a. (analysis is based on value in US dollars).

But these returns did come with one remarkable cost – risk. The annualised volatility of Bitcoin over this period was 70% while the volatility of gold was 14%. This means that on a risk/return basis, there was a clear advantage to gold. The ratio of volatility to returns was 0.7 for Bitcoin and 1.1 for gold.

The time series of returns also show demonstrate positive skewness for each of these assets. This makes it a good diversifier (apart from anything else) for inclusion in a portfolio that also has equities. Equities has negative skew. There is an old saying that equities returns go up

Fixed interest

by the stairs (slowly) and down by the elevator (quickly). Bitcoin and gold bullion have shown they do the opposite: They go up quickly and fall more slowly.

Kurtosis for Bitcoin and gold bullion was negative, meaning the tails of the distribution of return are thinner than would be expected with a normal distribution. The reason for this for Bitcoin is obvious. It has an autocorrelation of 0.18, which means that Bitcoin future returns are somewhat dependent on past returns. Equities, on the other hand, have positive kurtosis, indicating that tails are fatter than for a normal distribution.

Inclusion of Bitcoin and/or gold bullion has the potential to create a more normal distribution of returns.

Another statistical measurement to deal with is correlation. Inclusion of assets with a low correlation with another asset class is one of the easiest ways to create portfolio diversification. Interestingly, the correlation of returns between Bitcoin and equities is much stronger than between gold buillion and equities. The correlation between bitcoin and equities is around 0.4, which compares with the 0.1 correlation between gold bullion and equities. fs

Inflation and yields

Sanjesh Pinnapola

T

he 2024/25 financial year has seen inflation seemingly bought under control. Equity markets posted strong returns and even bond markets had their best financial year return since 2019.

Australia’s financial year began with the monthly inflation indicator reading 3.8%, still easily above the RBA long-term target.

By May 2025, the latest available figure, that inflation figure had been brought down to 2.1%.

The narrative globally was largely similar. The US managed to bring inflation to as low as 2.3% during the financial year, but June saw a worrying uptick to 2.7%. India too, which began the financial year with a headline CPI figure of 4.8%, has seen it eased down to 2.1%.

The UK proved to be the outlier, with inflation ramping up from 2.0% at the start of the financial year to 3.6% by its end.

Worryingly, they too saw a noticeable monthly uptick in inflation in June.

July was widely tipped to see the RBA drop its target cash rate further from 3.85%, already below the 4.35% at the start of the fi -

nancial year. In a surprise to markets, they chose not to. With the unemployment rate figures released afterwards showing an uptick from 4.1% to 4.3%, the likelihood of an August decrease in cash rate has been raised.

The US Fed was similar, reducing interest rates from 5.5% to 4.5%. The UK lowered rates from 5.25% to 4.25% over the same period.

As a result, bond market returns have improved.

The Australian fixed interest market, as measured by the Bloomberg Australia (5-7Y) Index, delivered a steady 7.5% for the financial year. Internationally, bonds delivered a lower 5.4% return for fixed interest investors according to the Bloomberg Global Aggregate Index.

That is not to say the current environment is without risks.

Concerns over the ever-increasing levels of US government debt have pushed up US bond yields, though yields did fall 17bps in June. There is still contagion risk stemming from the upcoming Japanese election, where the result could see Japanese bond yields spike. fs

Source: Rainmaker/CoreLogic RP Data

Source: Rainmaker/CoreLogic RP Data

Figure 2. Yield curves (%pa) at June 2025

Figure 1. Central bank interest rates

Figure 2. Comparing returns 7 years to June 2025

Figure 1. 7-year distribution

Prepared by: Rainmaker Information Source: Factset

Prepared by: Rainmaker Information

Source: Factset

Alternatives CPD Questions 1–3

1. Out of Bitcoin gold bullion and international equities, which has the highest volatility:

a) Bitcoin

b) Gold bullion

c) International equities

2. Autocorrelation measures the dependence of future returns on past returns. The asset with the highest autocorrelation in our sample is:

a) Bitcoin

b) Gold bullion

c) International equities

3. The correlation of returns between Bitcoin and equities is higher than between gold bullion and equities.

a) True

b) False

5. Which country saw inflation

6. What return did the Bloomberg Global Aggregate Index report for fixed interest investors?

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TAKING THE REINS

Georgina Dudley had been with JANA for 14 years before taking on the top job and she is uniquely positioned to lead the firm forward in a quickly changing environment. Eliza Bavin writes.

Georgina Dudley spent the formative years of her life in the Southeast of London and, while completing a master’s degree at Oxford University, never imagined she would go on to become chief executive of an asset consultant in Australia.

“I went to school in Kent, then university in Oxford and studied chemistry. I think that is more normal in an English environment where university is about learning how to learn and find out who you are, as opposed to who you’re going to be, which I think really suited me, because I didn’t really have a clue what I wanted to do,” Dudley says.

“I picked chemistry partly because of that. I thought that it was the broadest thing that I could do which would give me lots of options for what I might want to do next. I think when I was growing up, I wanted to be a vet, a doctor, all sorts of different things, and then I moved into finance as I got a bit older.”

But going from a degree in STEM isn’t too far of a cry from finance, Dudley says, as being in a data-driven field is something that was always attractive to her.

“I liked chemistry because it’s more about the application of an idea and problem solving,” she explains.

This natural proclivity towards problem solving is what led Dudley to her first internship at Goldman Sachs, where the firm brought in several young people from all different areas of study.

“… they had a couple of people from a STEM background, a couple of people from languages, a couple of people from arts. And that idea of having people that think differently and approach a problem differently is something that I really appreciated, and I still think it’s a fantastic idea now,” Dudley says.

“I think in investments if everybody approaches a problem the same way, you don’t necessarily get a great answer.”

Following her internship, Dudley went back to school to complete her degree and faced the same issue that many graduates did around 2001 – trying to find a job during a recession. But she eventually managed to land a role at Russell Investments, where she was able to gain a much better understanding of the world of finance.

“I didn’t really have a strong view about what I wanted to get into, but I liked the idea of finance and investments more than banking,” she says.

“Moving into the world of Russell I felt would give me a great overview of investment management and the wealth industry, and that would be a leapfrog to working out what I wanted to do and where to go.”

But “leapfrog” she did not. Dudley ended up staying with Russell Investments for close to six years and was ultimately the role that brought her to Australia.

“I was working in a team that was split between London and Sydney and we used to travel to meet up in Asia on a regular basis. At some point, they were looking at ways to bring the teams closer together and I had never been to Australia,” she says.

Dudley jokes that when the opportunity to move to Australia was raised with her, the only impression she had was based off what she had seen on Home and Away and Neighbours, and as a professional woman in her mid-20s, there was no reason not to.

“It was an opportunity to try something new, but I always knew that if I hated it I could just go back to London and I’d find something, whether that was still with Russell or somewhere else,” she says.

“In some ways it felt like a big, brave, adventure, but in others it was a pretty safe one at the same time. There were a lot of safety nets in place.”

After a few years working in the Australian office, Dudley felt like it was time for a change of role, but not of scenery, feeling she had more of the Australian lifestyle to experience.

“If you told me back then I would still be in Australia, I probably would have laughed. But I did feel that there was more for me to experience here,” she says.

“[With Russell] I was beginning to think, ‘well, I think it’s great, but I also don’t know how great it is, because I don’t know what else is out there’. So, I think it was just the curiosity of what else might be out there that made me look for other opportunities.”

Dudley acknowledges that there was a certain irony in deciding to look for another role in 2008 – right as the world was dealing with another recession, the Global Financial Crisis.

“When I found the opportunity at JANA, I was also moving from an equity-based role to a hedge fund-based role, which in the middle of 2008 certainly presented a lot of learning opportunities,” she jokes.

Having been with JANA for more than 17 years now, there almost isn’t a position within the firm that she hasn’t filled at some point.

“I can pretty much can tick off most parts of the business, and I think it’s one of those things where, as a chief executive, that’s an incredibly beneficial background to have in terms of being able to understand the different parts of our business,” she says.

Having such an in-depth knowledge of the business means when Dudley stepped into the chief executive role in December 2022, she was able to put a lot of her focus on driving things forward, and less time wrapping her head around the moving parts.

“We’re very much driven by the purpose of being able to make a difference for our clients and working with them to improve investment outcomes.

I think in investments if everybody approaches a problem the same way, you don’t necessarily get a great answer.

Georgina Dudley

That is something we are very proud of, but it is something that requires an incredible amount of work to keep delivering that into the future,” she says.

“We’ve got to keep changing the business model in terms of being able to support the people driven business. So that’s thinking about the business model in terms of ensuring we have more agility in the current market.”

The wealth and superannuation industries in Australia are very illustrative of the pace of change, and she is working to ensure JANA is at the forefront of that change.

“Data and technology, and how it can be used, is a critical trend that we have put a lot of work into the past few years and will be a very big focus of what we do in the future,” Dudley says.

“People are at the heart of what we do, and it’s a trust-based business, it’s a relationship and partnership-based business with our clients.

“We don’t think people are going to be replaced in terms of the role that they have, but how you couple the people with data, analytics, automation, with thinking about how you can really deepen the insights through data, improve the efficiencies and really enhance what we’re able to bring to our clients, that’s something that I think will change a lot in the next few years.” fs