The lack of uniformity in the valuation of unlisted assets is exercising the minds of regulators worried about extreme volatility in markets.
comes in the same month the prudential regulator put the heat on certain superannuation trustees to ensure valuations of unlisted assets reflect market conditions.
APRA expects to begin consulting on updated prudential guidance on investment governance and asset valuations later in the year. This provides the benchmark for Franklin Templeton’s assessment that Canva, which runs a global graphic design software platform, is worth $37 billion, or about 27 times its annual revenue run rate of $1.35 billion.But the venture capitalists backing Canva are not putting their hands up to follow Franklin Templeton’s lead and write down their investment.
It is easy to forget that Canva’s $55 billion valuation released in September last year was based on a capital raising equivalent to less than 0.5 per cent of its total value.APRA’s concern about the weaknesses in the processes used by super fund trustees to assess the valuation of unlisted assets arose following the COVID-19-induced panic in the sharemarket in March 2020.
Super funds that fail to keep their unlisted assets up to date are transferring value from those who remain in the fund to those who leave. Someone with 20 years of experience on the investment committee of a large super fund tells Chanticleer the appropriate discount rate is about 3.8 per cent even though long-term bonds are trading at levels below this.
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