AustralianSuper, UniSuper and the industry fund-owned IFM Investors were among the most active participants in NAB’s $3 billion institutional placement.
We are in a very strong liquidity position. This is why you want a lot of liquidity. You are now seeing these opportunities emerge and we are taking advantage of it.
Reuben De Barros, head of active equities at IFM Investors, said he was also on the lookout for quality stocks being offered at discounts amid the flurry of COVID-19 emergency raisings. IFM is owned by 27 industry super funds and manages approximately $150 billion in assets.
We assess every deal that comes across our path and it really depends on the dynamics but we are open to provide capital where the deal is good, he said.
Weve always managed our portfolios in a way that allows us to participate and take advantage of opportunities when they arise.
AustralianSuper’s Innes McKeand said the $180 billion fund would be “happy to assist” the other big banks should they require more capital, after chipping in to the NAB placement.
The Financial Review can reveal that AustralianSuper has committed at least $300 million to companies that have raised capital during the COVID-19 period, including QBE, Ramsay Health Care and Reece Plumbing, in addition to NAB.
The public commitment to big bank balance sheets, and readiness to dish out more, indicates the big not-for-profit funds are keen to play a role in helping corporates survive the crisis, as they did during the GFC.
But it also demonstrates their eagerness to separate their own operations from those of fellow funds that may face liquidity challenges as a result of relatively higher early withdrawal requests from members and relative over-exposure to more illiquid assets.
Hostplus, which manages the savings of workers in the shuttered hospitality and tourism sectors, had paid out $603 million to almost 85,000 claimants, as first reported by the Financial Review.
The $50 billion fund is one of a number that has come under fire from Superannuation Minister and former AustralianSuper employee Jane Hume for alleged “fair weather” investment strategies ill-suited to the pandemic crisis.
Early this month it revealed it had $6 billion in cash and 60 per cent in liquid assets, such as shares and bonds, after raising concerns about the government’s early access scheme.
Hostplus declined to comment on the NAB capital raising.
The transaction follows AustralianSuper chief executive Ian Silk warning earlier this month that if redemption requests under the controversial scheme blew out well beyond Treasury’s estimate of $27 billion it may put a spanner in the works of some funds’ ability to invest.
The fund’s chairman Don Russell told the Financial Review Banking & Wealth Summit crisis briefing in March that this capacity would prove “invaluable in the next six to 12 months”.
‘Ross McEwan fan’
Mr Pearce said UniSuper’s participation in the NAB raising was partly motivated by the fear of its considerable shareholding becoming diluted.
But it was also an endorsement of NAB chief executive Ross McEwan’s post-virus turnaround strategy, unveiled on Monday alongside the equity raising.
It was a shrewd tactical move by NAB to be the first cab off the rank. It was also shrewd in that it was big enough so they dont have to come back to market again, Mr Pearce said.
Im a Ross McEwan fan and he has made the right decision.