Australia’s $4.2 trillion superannuation pool has been highlighted as a potential source of much-needed capital for early-stage innovation, with a new government issues paper pointing to the current system’s conservative investment culture as a barrier to research and development growth.
The federal government’s Strategic Examination of Research and Development (SERD) paper on investment and capital shows that superannuation funds dedicate only a small share of their portfolios to private equity — about 4.4 per cent on average — and much of that is invested offshore rather than into Australian ventures.
The paper says regulatory settings and performance tests encourage trustees to prioritise low-risk, lower-return assets, while disclosure rules can make higher-fee asset classes such as venture capital appear unattractive even when net returns are stronger.
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