AustralianSuper makes a monster investment loss

AustralianSuper invested heavily through Vista Equity Partners into Pluralsight the online learning platform only to now come out with the full capital loss of $1.1 billion.
I know that each super fund is trying to provide members with positive returns, but I would question if investing into an online education start-up is the safe and responsible way of investing other people’s hard earned retirement savings.
AustralianSuper blames COVID, more difficult economic conditions, rising interest rates, increase competition.
Those are the usual market changes that a good investment manager would take always into consideration and managed as required with due diligence and responsible governance.
And let’s be honest, how long can investment companies blame COVID? That was already years ago.
The loss of $1.1 billion is not reduction of asset value due to market conditions, this is the full write-off of total investment.
Imagine you invest $1MIl into a bank account and then one day your balance is $0. In AustralianSuper fund case this is $1.1bil of loss.
Contact details: Katherine Isbrandt of About Retirement
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[@Neilworldwide]

Thank you Katherine for being the only person questioning what happened after this massive loss was swept under the carpet and forgotten by the Main Stream Media. No investigation, no impact analysis - which investments/ members impacted? Total silence……….

[@nickreid5297]

Australian Super has $341 billion in investments. The loss of $1.1 billion sounds bad, but it's only 0.3% of the funds under management. So instead of generating a return of (say) 7%, the return will only be 6.7%. That's not a disaster. OK, it's a bit worse than that because not all of Australian Super's assets are held by customers in the high risk/high yield options. But the principle remains. In the overall scheme of things, a billion dollar loss has to be set against the multi-billion dollar gains. So long as it doesn't happen too often, it's just part of life.

[@thomasfisher5742]

well read nick.... some people just don't like to do the MATH LOL

[@borisburkhart]

you must be a Troll! They will keep investing in high risk as he has admitted even with the 1.1 billion loss! Wake up D

[@nickreid5297]

@@borisburkhart Not a troll. Just a former economist.

[@Bobbydazzlla]

@@borisburkhart Nothing a simple google search and a quick calculation couldn't work out. What's next -complaining they've made a 4.5% profit ($15 billion)? If you can't do pretty simple maths, keep out of the comments section and let the grown up do it.

[@ProspectorswithParkinsons]

Thanks Katherine, this information is so important to us so as we can make 'evidenced based decisions' on how our money is invested. I was with Australian Super and transferred out into a managed SMSF. I also invested into another Industry Fund for over 35 years and while they were good in the accumulation phase, when I retired, they were not very good in the income retirement phase, admittedly this was at the end of 2021 and COVID was getting the blame for everything but I dropped $100k in the first year of retirement as a firefighter. All of the products I chose within this fund all ran negative returns.

[@JimboJones-qn4wd]

4:41 - COVID will be blamed for EVERYTHING for the next 100 years. It's an easy SKAPE GOAT and quite frankly WE ARE ALL SICK OF GOVERNMENTS AND CEOs BLAMING EVERYTHING ON THAT!

[@pkd6369]

bet we back up POLITICIANS& BEURACRATS SUPER against loses "pretty sure we DO!!

[@kerryryan5116]

Another financial advisor bashing an Industy fund...the loss just offsets their tax liabilities. I am with Australia Super and I am earning about 9%.

[@michaeldare7610]

I dont believe there is an issue with the 9% and there nothing wrong with being informed with facts. This is not something I have heard about from Australian Super themselves - nothing like a little disclosure to help make informed investment decisions I say

[@manflynil9751]

Perhaps you missed the part of a $1.1 billion write down of members' retirement savings. 😂 Denial is not a river in Egypt.

[@grasmi]

SPY was up 26.19% in 2023, and is up 16.37% YTD. The geniuses gambling with your pension funds in PE investments generally don’t beat a passively managed index after fees over the long run.

[@manflynil9751]

Vista Equity acquired Pluralsight and three years later announced they had written off the entire value of Pluralsight. This has all the characteristics of a leveraged buyout. A leveraged buyout in simple terms, company A buys company B using debt, company A makes dome adjustments to maximise profits, eg. layoffs etc, bump up the share price then they sell their shares, strip assets and profits from company B before handing the carcass back to the creditors.

[@Rvholmes1]

I’m very disappoint in the title of your video. To me it seems like it’s “ clickbait” with a scare making headline. Australian Super Fund performs well overall. You are scaring uneducated users. Shame on you.

[@MichaelJessen]

So, you're reporting a $1bn loss on $341bn funds under management. After a ten year winning streak with 12% compounding annual return. And this being just one asset class among many that members' balances are allocated to. What you're saying is interesting on the surface, but there's a lot of context here you're not reporting. And how much did individual members actually lose from this single loss? Wouldn't it be better to look at long and medium term outcomes for members? Super is after all a very long term investment.

[@tecnaman9097]

Hi Katherine. It would be very helpful if you could indicate which portfolio options this affects. Or is it going to be an across the board loss spread over all investment options? I've read there is 'political' pressure for APRA to investigate this massive blunder. Unfortunately, I have a super pension with AS and this is deeply disturbing news to say the least.

[@jessekoch3480]

Get out of there fast.

[@thylacine1004]

Im with cbus and get 5% for cash, no risk atm,im doin g a warren buffet,just waiting for a crash,if it doesnt come,i will just take 5%...

[@jonahtwhale1779]

CPI is at 4%, real inflation - that normal people experience, is even higher. So at best your 5% is actually 1% in real terms.

[@thylacine1004]

@@jonahtwhale1779 You are absolutley correct....i thought real inflation was at 8%,so -3%...

[@dontrump4697]

Mine only pays 4% but at least doesn't go backwards.

[@aussiecqrider9524]

I am an AustralianSuper member, and if there has been a huge loss, it is not being reflected in my account balance. It also probably depends upon what investment option you are using. I am in a pension phase, so accumulation accounts might be different, but current return in balanced option is 9% pa, which is acceptable for me. These big losses might be part of the high growth investment option which would fluctuate a lot more. Despite what is being presented here, these losses will affect members differently depending upon their investment options.

[@alangarnham706]

I am active with steering my super, it is not an SMF but I have 6 monthly reviews to look for any adjustments and improvements. Under no circumstances will I steer my super into startups. I look for well managed, strong midcap and larger cap investments for Australian and international shares, good index funds. My super is tracking well. If this happened to me, I would share the blame between myself and my super mananger. Thanks Katherine, great information.

[@parthabhattacharya6837]

For last couple of years Australian Super performance is poor compared to other Industry Super funds like Uni Super or Hostplus for their balanced fund. Whether it is a Governance issue or complicity of the board or incompetence of the decision makers is hard to determine without a thorough independent investigation. I am thinking of rolling over my super to a clean performing fund.

[@tecnaman9097]

The deafening silence from Australian Super does nothing to soothe the anxiety of superannuants. I have made an 'official' enquiry, but for some obscure reason it's considered a 'complaint' by AS and subject to their 'compaint' process. I don't expect I'll get an answer to my question who carries the can for this loss. Probably just some corporate gobbledygook as is the case these days. Hopefully the regulator forces them to come clean if they won't

[@petermills1402]

Katherine, you probably need to list which parts of the investment spectrum within Aus Super will take this loss and how much of the total Aus Super balance sheet is this loss. Is it the Int Shares portfolio, the Aus Shares portfolio, the Balanced Fund, etc etc etc. I think your information is 'incomplete' at best. Please clarify before the scare tactics because what you say is scary.

[@Rick-kj9dd]

Katherine said that the loss affected the balanced fund. Over a billion dollars was written down. That is a loss to the portfolio. It was a Private Equity investment which was written down in value which was an investment held within the alternatives sector of a balanced portfolio.

[@donkaster9738]

@@Rick-kj9dd So, what percentage of AustralianSuper balanced fund portfolio is lost, and when the members are going to see that in their balances? AustralianSuper has 341 billion under management, It shouldn't be a big dent.

[@JamesDeanDiedIn1955]

​@@Rick-kj9ddfund balance is different to balanced fund

[@mchaves7663]

I remember hearing the ceo saying they were investing big in graphene, Syrah resources. That worked out well until late 2023 when the stock collapsed.

[@spikey8085]

They're lying to us they are stilling from us I don't trust corrupted CEO and greedy monsters banks are the same problem

[@sn2511]

Hello Katherine, i have visited your website several times in recent weeks with view to making an appt. You have no availability this year & dont have a calendar up for next year yet, so unsure why you keep promoting that option in your videos. Concerned its a furphy just to drive traffic to your website. Appreciate if you would explain yourself.

[@tasmedic]

I had the same thoughts, so I contacted her via the email address provided, and fortunately she does get cancellations in her calendar which come up from time to time. I did get a cancellation and so it's worth just asking the question of her via email.

[@RogerHammond]

I occasionally bump into the CFO for AustralianSuper at the corner coffee shop. He once said, with the funds under management, the challenge is finding markets to invest in as they're heavily pegged in all the usual markets.

[@DarwinianUniversal]

I was a kid, so I wasnt paying attention to my multiple super accounts. Banks took 2/3rds of my super in fee's and insurance costs before the ATO took guardienship of it. But super doesnt only have banks dipping their greedy fingers into the super funds, to worry about. Super is a big pool of money, and you can bet that any player that has an angle to dip into it, will do so. Governemnts and traders etc etc. Its too tempting for them to ignor

[@JohanSchmidt]

They’ll just shrug their shoulders and talk about risks in investing, yet still take their full fees! Investing in a basic S&P500 fund would have easily beaten the returns of 10% they’re boasting about

[@PhilInAustralia]

If you look closely at the communication/statements to members/investors over time, during a rising market many "investment professionals" fall over themselves in self promotion telling us how good they are, and then in downturns, how bad "Mr Market" and all of the other external factors are. They can't have it both ways, and astute investors see through the BS.

[@ravipeter-andrew1603]

Thank you Katherine a timely reminder. I will check. Much appreciated.

[@JamesDeanDiedIn1955]

Holy hell. How does AusSuper pour 1.1b into a high risk dog?

[@Kurlzero]

Got as far as 4:37. No it’s not a safe way of investing, by definition this is for the higher growth potential and risk option. Is it responsible? Again, by your definition yes. I’ve not bother to check how this has impacted current valuations, but if there is a loss, I hope people don’t follow this fear mongering and lock in their losses.

[@dontwatchtv8495]

Pluralsight is a quality online learning tool. Better I have lost a thousand via Australian Super than self investing. I wouldn't be able to get the same diversity or access to private equity. As long as they provide a balanced return a few horrific losses are to be expected.

[@CharlesBrown-q8q]

I am waiting for my partners super to dip and we will add a top up and hopefully take advantage of the situation.

[@Briansunday-zw8wb]

I just checked my balance and it is actually up so unsure who will be impacted by this loss. Is it only high gain portfolio or balanced?

[@oldbloke204]

My Wifes Super is in Aust. Super Balanced and it's down a small amount but then the stock market took a dump yesterday so who knows. Depends on lag times for updating fund balances probably but I suspect that this would involve the higher risk/higher reward type options.

[@Briansunday-zw8wb]

@@oldbloke204 yeah that was my thoughts.

[@donkaster9738]

@@oldbloke204 May be that loss is still in the system, and only after officially registered loss will be deducted from the balance?

[@redruby5689]

Thats awful...I thought Australian Super was the best. I feel bad for those relying on that money to survive. I have always watched the market and changed my investment option. Its like gambling. Your risking your money in the hands of others.

[@shuyingli8318]

Not just that😢you lose investment returns, in the mean time you also pay fees even if they make a loss.

[@pkd6369]

they donated millions to a union a year ago from MEMORY "CLOSED MY A/C NEXT day

[@billhackett6715]

If it was not for the franking credits the superfunds would earn less. When a fund invests overseas hand in private companies how is the investment valued?

[@LawpickingLocksmith]

Sweethart, when voters vote for a certain democratic representation, they go on a journey and not onto a destination. Socialism is the ultimate journey and people in hystory have proven and proven again to be a journey. 60 million humans asked and believed Mao about his perfect plan. Nobody needed a payout because all died from starvation.

[@user-fe1jg3gs8l]

The investment management and those responsible need to be held to account and sued extensively.

[@VV-lr7xe]

You haven't mentioned unlisted assets /other assets are only for their managed investment options such as pre-mixed, balanced etc which by the way most of the folks are

[@stevenrobinson9095]

Hi free thinkers, in Queensland there was a superannuation fund called QSuper, Qld government Public Service fund. In 2016 the Qld government Treasurey Pitt stole 4( four) billion dollars from the fund under the directive of Actuary who denied the advice. For those under Defined Benefit these funds could have been converted to another level multiplier in retirement. QSuper was merger into Australian Super maybe 2023, there is many ways governments & global tyranny committed crimes to disadvantage of hard working citizens. Posted 9-09-2024. Australia could not run a chook raffle under global tyranny rape & pillage. Where is Australia gold & oil reserves, not in Australia.

[@Harrybollox]

Looks like a class action is due , the big law firms must be watching closely

[@aussietaipan8700]

201 liked, thanks Katherine.

[@blondie8849]

When you said Monster I thought you were talking about Australian Retirement Trust as they use a monster in their current marketing campaign.

[@grahamgillard3722]

Hang on. I’m retired. My superannuation investment profile is fairly conservative, as it would be for most retirees - about half in shares and half in fixed income. So our exposure would be minimal, wouldn’t it?

[@keithlewis1881]

Also I have reason to believe that the IT Systems of Australian Super are not as robust as they would have you believe, leaving them vulnerable. I moved my money out of AusSuper.

[@madhumitagoswami1536]

All investments cannot be successful. Some do well and some don’t. Australian Super has provided a good return to its members. What is necessary is that the governance of the Fund (and indeed of all funds) should be beefed up to protect the interests of members.

[@btiger1281]

Super funds are like Casinos, few win most lose , you are better to invest your own money. One comment was saying its only .3 of a percent , cosidering most funds have a few major loses over the decades. Its a big deal.

[@razadaza9651]

Sorry but who told you pluralsight is a startup? Where do you get that information?

[@lbarbato6425]

So far this financial year, July 31, 1.38% return so, what’s wrong.

[@johntakacs6482]

Pivate equity is in a bubble and has only been around a decade or so. If you don't understand it dont invest in it and dont be brain washed by sprukers. I agree that the super fund was careless with peoples money and didn't explain the full risks of Private Equity. at the moment I invest in short term treasuries which = cash. Look at Buffett, he has hundres of Billions in cash, the smart money is getting out and the dumb money coming in.

[@johnm7251]

Sounds like this advice is too late if the losses have crystallised

[@timothydevries383]

The audio is terrible. Invest in a microphone or use a smaller room.

[@paulsandford3345]

My advice is to get your money out as soon as you can? Take your money of the super roulette wheel!

[@SteveSmith-zz4ih]

AS is involved with "Lincoln Place" retirement homes, who allegedly take a 20% fee when a home owner sells, there is Legal proceedings ongoing, but i will NEVER put my money in AS, personal opinion.

[@billburr5881]

Superfunds are run to benefit their members - not to benefit the customers of the entities the superfund invests in. I agree with you that some retirement villages have questionable business practices.

[@mindofown]

devastated

[@davidpaton1588]

my super did great in covid -international shares amazon , microsoft and apple high risk??

[@herbertvonsauerkrautunterh2513]

I hate super, with a passion. I don't care any how tax effective it is or can be. I can use that money better now and i hate it that i have no control over what is mine. Luckily i have my own business and don't have to pay in bit i still have an amount in it. The sooner i get out of Australia the better. This place is a compliance control state oligarchy

[@ronfesta771]

Me thinketh a very well orchestrated set of events used to transfer wealth from the., poor and middle class to the........wealthy!@!?😃🤪😉

[@Colt3854]

Now, talk about AMP and it's losses. See how they compare. No doubt a self interest funds manager who has never made a loss.

[@ralphgertis7614]

You worry too much. Counting tea leaves.

[@razadaza9651]

Well you may want to control you allocations. Most people do not care and leave it on the defaults

[@alanchalkley8743]

What does anyone expect from a triangle fund?

[@paulryan1578]

It’s not there money it only effects there commissions

[@captkev55]

Very disappointing post. Waste of time.

[@nevmcc3884]

Click bait for Australian super members. Why not do a program on property values? that will get lots of clicks too.

[@user-fz7zu7no9o]

but it was always a risk scam you can not invest in stocks without risks and lossess simple common sense no need for a financil planner

[@billburr5881]

This loss will help them reduce their tax bill this year - the tax is also paid by their members contributions. The ATO takes over 200Billion from Australians each and every year - so investments losses are trivial when compared to what the Canberra Mafia take!

[@gsmall6101]

There’s nothing super about super.