Australia’s largest superannuation funds say they are stockpiling cash and stress testing their solvency amid an escalating offshore pension fund crisis and a global shift toward owning safer assets.
Local superannuation funds have been watching United Kingdom’s pension funds desperately scramble to sell assets, including bonds, Australian mortgage backed securities and global equities to meet margin calls. This has been triggered by margin calls relating to the hedging strategies UK funds put in place to protect them from falling interest rates.
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Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney. Connect with Jonathan on Twitter. Email Jonathan at jonathan.shapiro@afr.com
Emma Rapaport is a co-editor of the Street Talk column. Prior to that, she was a markets reporter at The Australian Financial Review. Connect with Emma on Twitter. Email Emma at emma.rapaport@afr.com
