Retirement
Should super funds invest in venture capital?
Superannuation funds that offer members exchange-traded funds could be harming small caps and early-stage growth companies, an industry expert has said.
Should super funds invest in venture capital?
Superannuation funds that offer members exchange-traded funds could be harming small caps and early-stage growth companies, an industry expert has said.
Stoic Venture Capital partner Dr Geoff Waring said Australian start-ups were being materially harmed by the new strategies of superannuation funds, such as the drive towards exchange-traded funds.
“Superannuation funds have been increasing their allocation to exchange-traded funds as they are easy to invest in,” Dr Waring said.
“This has facilitated greater diversification, including towards overseas technology indexes and higher-growth investment opportunities en masse, which has benefited members.
“This is having a negative impact on Australian small-cap shares not in the ETF indices due to their size, which means they are losing billions of dollars of potential investment to large cap and overseas companies.
“The trend of mergers between more superannuation funds will deepen this impact,” he continued.
Dr Waring said the use of exchange-traded funds was undermining the establishment and growth of early-stage start-ups and would ultimately harm Australia’s economic future.
Superannuation funds should diversify more into small-cap fund managers and venture capital managers to finance growth industries as well as increase benefits to their members.
“Less investment into smaller, younger Australian companies will have the corollary effect of harming the future development of our economy and the provision of new employment opportunities,” Dr Waring said.
“It ignores the higher returns selected venture capital managers could bring to the superannuation industry.
“Superannuation funds could be earning more through longer-term venture capital investment than compared with today’s short-term public equity markets.
“This is particularly the case for industry-focused superannuation and specialised venture capital funds which are committed to the same vision – creating a better future for their industries and their members.”
RELATED ARTICLES
About the author
About the author
Superannuation
Rest posts healthy returns following a positive end to 2025
Rest, one of Australia's largest profit-to-member superannuation funds, has reported impressive returns in its flagship MySuper Growth investment option for the year 2025. The fund is optimistic about ...Read more
Superannuation
Rest marks milestone with first private equity co-investment exit
In a significant development for Rest, one of Australia’s largest profit-to-member superannuation funds, the organisation has announced the successful completion of its first private equity ...Read more
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Rest posts healthy returns following a positive end to 2025
Rest, one of Australia's largest profit-to-member superannuation funds, has reported impressive returns in its flagship MySuper Growth investment option for the year 2025. The fund is optimistic about ...Read more
Superannuation
Rest marks milestone with first private equity co-investment exit
In a significant development for Rest, one of Australia’s largest profit-to-member superannuation funds, the organisation has announced the successful completion of its first private equity ...Read more
Superannuation
Expanding super for under-18s could help close the gender super gap, says Rest
In a push to address the gender disparity in superannuation savings, Rest, one of Australia's largest profit-to-member superannuation funds, has called for a significant policy change that would allow ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
