UniSuper’s chief investment officer John Pearce says the fund will ride the Australian sharemarket but sit out the float of Firmus Technologies, a $44bn AI company that is expected to burn cash for years. Pearce, who manages close to $175bn at the nation’s fourth-largest super fund, told the Money Puzzle podcast that he does not see value in backing the so-called “neo-cloud” group or the US-based AI firm Anthropic.
High risk, high demand for cash
Firmus Technologies is currently in the process of listing on the ASX, and Pearce warned that the company will continue to tap investors for fresh capital. He said the firm is unlikely to stop demanding money once it joins the ASX 200 index. The investment chief described the situation as a “loss-making” enterprise that will be “bleeding cash flow for the next couple of years.” Because of this, UniSuper has chosen not to participate in the offering.
Alternative Growth Paths for Superannuation Returns
John Pearce noted that Australia’s biggest super funds can still achieve double-digit returns without backing high-risk AI floats. He stated that strong US corporate profits and a super cycle in capital investment fuel further sharemarket gains.
Valuations in unlisted markets look stretched
Pearce also addressed the related float of Anthropic on Wall Street, pointing to valuation concerns in the unlisted market. He said the models owned by Anthropic and OpenAI are effective, but the companies are losing between $US15bn and $US20bn a year. Despite the heavy losses, the market has assigned a valuation north of a trillion dollars to these entities. Pearce said he struggles to reconcile these figures with the current financial performance of the businesses.
The investment chief believes that rational pricing of assets is currently possible with today’s bond rates, unlike the zero-rate environment of 2020. He suggested that the current rally is more sustainable because of this rationality. However, he remains skeptical of the valuations assigned to unlisted AI companies. Pearce admitted that time will tell who is right and who is wrong regarding these high-profile investments.
Local credit markets and bank exposure
Concerns in the local private credit sector have recently surfaced after several funds, including Metrics Credit Partners and Centuria Capital, froze redemptions. Pearce said this is not a major issue for UniSuper because only around 10 per cent of its private credit portfolio is in Australia. He added that the fund has indirect exposure to property through its massive holdings in the banks, which allows it to achieve diversification without direct commercial property stakes.
Long-term view on Australian returns
As the Australian sharemarket trails Wall Street in terms of returns, Pearce reminded investors that the gap may not last forever. He pointed out that over a longer period—between 20 and 30 years—Australia has held its own against the US, despite recent underperformance. The balanced fund managed by UniSuper returned 10.4 per cent in the year to June 2026, outperforming the median return across the superannuation sector of 9.3 per cent.
