Make crypto part of your super? The doors are opening

Australian superannuation funds are warming to crypto, with funds allowing assets they manage to be invested in super, according to a recent report on the SMH.

The report quotes one of the partners at Telstra Ventures, one of the largest venture capital firms in the country, as saying that venture capitalists and super fund investors are re-negotiating to permit investment into the crypto sector.

“Historically it was a vague or gray area, but there is an education process and, in some cases, intense renegotiation happening because I think both sides recognise it’s a win-win situation,” the Telstra Ventures partner, Yash Patel, said in the report.

Australian superannuation funds have traditionally been risk averse when it comes to crypto, considering the market fluctuations to render the assets excessively speculative. However, this is changing, as high inflation and other economic factors lead super funds to investments that will be able to beat the market.

Late last year, one of Australia’s largest superannuation funds, Rest Super, indicated at the fund’s general meeting that it was looking at potential investments into cryptocurrency.

“I do think that, in an era of inflation, it could be a potentially good place to invest,” Rest Chief Investment Officer, Andrew Lill, said at the meeting: “It’s still a very volatile investment, so any allocation exposure we make to cryptocurrencies is likely to be part of our diversified portfolio as initially a fairly small allocation that may, over time, build.”

However, other funds will take more convincing before adopting crypto themselves. The largest single fund in Australia, AustralianSuper, has adopted a hardline stance on the issue, calling cryptocurrencies “not investible,” on the basis that they do not generate an income stream. The fund does not hold gold in its portfolios for the same reason.