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Altair's Parker defends decision to liquidate investment fund on property bubble fears
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In a surprise move, Australia's booming property market has made one asset manager worried enough to shut down his multi-million-dollar fund and hand back all the money to his investors.
Philip Parker, the chairman and chief investment officer of Altair Asset Management, had written to investors explaining that he was returning their funds at an "overvalued and dangerous time in this cycle"."In the last six to eight months, the investment committee of Altair have felt, to varying degrees, that the property market was heading into bubble territory," he told the ABC in an exclusive radio interview on Business PM.
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"The massive leverage that you're seeing in terms of people's exposure to property will then flow over to other liquid assets," he said.
"Secondly, I felt China property and debt issues will become a major factor later in the year.
"And the overvalued Australian equity market is significant for active investors. We were finding, in the last three to five months, less and less value.
"The fourth reason, that's quite to clear to me, is that there is an oversized geopolitical risk, and there's an unpredictable US political environment."
"There is a significant risk of recession next year," he said."That's in small part due to the increase in US funding costs.
"The far more important issue is that housing - both the direct contribution, which comes from building and owning and transacting housing, as well the indirect contribution that comes from the wealth effect - look set to fade next year."
Mr Minack told the ABC that he played a minor role on the investment committee and the decision to shut down the funds was in no way connected to his views.
(Source: Australian Broadcasting Corporation )
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