Unlisted Assets

As many of you know we have always considered liquidity to be one of the key areas of planning.

It is not much fun being well off if you have no money to spend! So, when we are assisting our clients, we always ensure there is accessible funds.

The same should go for Superannuation funds, but recently the Chief Investment Officer of one of the largest industry funds announced in a newspaper interview that they now had almost a third of the fund in unlisted assets. The argument is that their own robust valuation process is better than the real-time valuation of listed shares.

His argument is that listed shares value everything on the last sale price, whereas unlisted are valued on the whole asset assuming a willing buyer and a willing seller.

We would argue that this is very simplistic. One thing we know is that there are many times where economic conditions are such that there are no willing buyers and/or there are very desperate sellers. In such times there can be huge stress on portfolios.