Australian asset manager liquidates funds on market fears

Xavier Trudeau
Juin 3, 2017

A top asset manager has made a decision to liquidate its Australian shares and return the cash to its investors because of an impending "calamity" in the property market.

Parker, who is a 30-year veteran of funds management, said on May 15 the company advised all its clients of the plan to "sell all the underlying shares in the Altair unit trusts and to then hand back the cash to those same managed fund investors".

They included: the Australian east-coast property market "bubble" and its "impending correction"; worries that issues around China's hot property sector and escalating debt levels will blow up "later this year"; "oversized" geopolitical risks and an "unpredictable" U.S. political environment; and the "overvalued" Aussie equity market.

The asset manager chose to liquidate its Australian shares and return the cash to investors because of an impending "calamity" in the property market.

Mr Parker cited the east coast property market "bubble" and its "impending correction, ' the "overvalued" Australian equity market, the 'unpredictable" political situation in the United States and concerns around China's property sector will blow up, according to Fairfax.

But it was the overheated local property market that was the clearest and most present danger, Mr Parker said.

Mr Parker also denied there was any other factor behind his decision - and said he is certain he is making the right decision. "I am absolutely certain we are in a bubble in this property market".

"Australia hasn't had its GFC event, we've been living in this fool's paradise".

"Mortgage fraud is endemic, it's systemic, it's just bad what's going on. You can see already that the commodity market is turning down".

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