First Super reviews private equity fund managers

10 April 2017
| By Jassmyn |
image
image
expand image

First Super has placed a review on its private equity program after concerns over the investment risks associated with poor labour practices at companies the fund is invested in.

The industry superannuation fund said the companies included Urban Purveyor Group, OSH Club, and Aero-Care, the firm at the centre of the Sydney Airport ground staff wages and conditions scandal.

First Super chief executive, Bill Watson, said the $100 million private equity program was under review and the fund was not making additional investments.

“We are extremely concerned at exposure to investment risk through companies that have enterprise agreements in place which have lower wages and conditions than what is contained in the relevant modern award,” he said.

“Businesses based on unsustainable labour costs or challengeable industrial arrangements pose a high risk of a permanent adverse movement in labour costs, potentially impacting on returns.

“Furthermore, where employees are denied a living wage, there is a risk of workplace injuries due to fatigue through excessive hours or high turnover.”

Watson said the review could mean that the fund might wind up its private equity program and could result in increased investment in other asset classes such as unlisted infrastructure, unlisted property, or more investment in listed companies.

“First Super is not interested in investing in companies that operate in a ‘grey area’ when it comes to labour practices,” he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 5 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

18 hours ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 3 days ago