Australian regulator warns $300m fund could be in danger

The Australian Financial Regulation Authority has warned the private equity fund that it could be facing a “significant shortfall” of funds if it continues to lose money, citing the fund’s poor performance in recent years.

The agency issued a statement on Thursday warning the fund would need to “make significant changes” to its strategy to stay afloat in the face of mounting losses.

It said the fund has “been operating in a challenging environment” and was “not achieving its objectives” since it entered the market in 2012.

“The fund has incurred significant losses in recent times, resulting in a substantial shortfall of funds and an adverse impact on the fund as a whole,” the statement read.

“[It is] critical to ensure that funds continue to achieve their objectives.”

The fund’s financial director said the loss had been largely “due to management mismanagement and the poor performance of the fund during the last decade”.

“In the early 2000s, the fund had the potential to be a leader in Australia in the development and growth of digital assets, and was one of the pioneers of a new type of investment vehicle known as an investment vehicle for social good,” Mr Alton said in a statement.

Mr Alton’s comments come amid a renewed focus on the role of private equity funds in Australian financial markets, with the Federal Government and the Australian Securities and Investments Commission also considering proposals to limit the role. “

As a result, the funds current net loss per annum is below the threshold of 1.5 per cent.”

Mr Alton’s comments come amid a renewed focus on the role of private equity funds in Australian financial markets, with the Federal Government and the Australian Securities and Investments Commission also considering proposals to limit the role.

In the wake of the recent Federal Budget, a new government taskforce has been tasked with reviewing the sector.

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