APRA tells super funds to improve unlisted asset valuations after Canva review

The news: The Australian Prudential Regulation Authority (APRA) has undertaken a “targeted review” of how super funds value Canva, as part of the watchdog’s heightened scrutiny of how funds are valuing hundreds of billions of dollars in unlisted investments.

The numbers: Graphic design platform Canva, whose valuation peaked at $62 billion in late 2021, was singled out for review by APRA owing to its public profile as an asset in a higher-risk asset class. The company, backed by many Australian super funds such as Aware Super and Hostplus, has seen its value fall sharply to $39.5 billion during a broader tech market downturn since 2022.

The context: While APRA found that most trustees had an appropriate valuation of Canva, the regulator has written to super fund licensees outlining areas for improvement. APRA noted some instances of inadequate interim revaluation triggers, deficiencies in information provided to the Board, gaps in Board skill sets, and a “lack of consideration of the expected performance and unit pricing impact of valuation decisions”.