Size of super impacting capital markets

Speaking at the Stockbrokers and Investment Advisers Association's (SIAA) 2025 conference, experts said the size of the superannuation sector is impacting smaller companies' ambitions to grow.

AUSIEX chief executive Patrick Salis said the concentration of Australia's superannuation sector has led to a large insourcing of investment management.

"That is something to keep an eye on. That is another form of vertical integration, which is a risk when you have all that capital chasing all the big stocks, you get more and more value concentrated into the large cap stocks," Salis said.

"It comes into the question of accessibility. I think there is room for everyone in the market, and that is the key to the health of capital markets. [It needs] that depth and breadth so everyone can be accommodated where they are on the risk spectrum. I think that's the thing we shouldn't lose sight of."

Morgans Financial executive director of corporate advisory Philip Lee agreed the concentration of capital in Australian markets is a concern.

"The growth engine of the Australian listed markets has been a small cap to big cap company. So not every company started their life as an ASX 200 company. They actually grew. They started with something. So, we need to create an ecosystem. We need regulations to support that too," Lee said.

"One thing that we haven't heard much of is the ability of us as an industry and us as a market to engage with retail investors. How do we grow the next generation of investors as much as we grow the next generation of Australian companies?

"I think it's important that we have a platform that enables participation by all sectors. We're seeing an evolution of markets here, of capital. We're seeing a concentration on one end of the self-managed super side, and then we're seeing a concentration the other side, we're seeing competition for funds through the professional managed markets."

Lee said this increasing turnover makes it "challenging and difficult for IPOs".

"I think we need to have an environment which means all sectors of the market have the opportunity to participate, because small companies aren't typically funded by big end of town institutions. They're funded by high net worth, retail and private monies first and then evolve into that space. So that's where I think we need to put our attention to have the next generation of companies."