The pension fund wrote off a $1.1 billion investment in Pluralsight after the latter entered restructuring.

The fund invests in US-based educational software in 2021. through the private equity firm Vista Equity Partners, in which he is an investor as well as acting as a co-underwriter in a private equity deal valued at approximately US$3.5 billion.

According to media reports, Vista and its co-investors have invested about US$4 billion in the firm, along with providing more than US$1 billion in debt financing.

As interest rates rose and market rivals threatened Pluralsight’s offering, the firm quickly deteriorated, culminating in the exit of Vista and AustralianSuper over the weekend in a deal led by private lenders Blue Owl Capital and Ares Management.

Pluralsight, once said to be worth US$5 billion, is now valued at just US$900 million.

Speaking to InvestorDaily after The Australian Financial Review broke the news that the fund had written down more than $1.1 billion in equity and loans related to Pluralsight, AustralianSuper's Mark Hargraves said the fund remained committed to private equity.

"AustralianSuper remains strongly committed to private equity as it has been the best performing asset class over five and 10 years for the fund, delivering 10 per cent and 12 per cent respectively for members," the head of international equities and private equity said.

According to Hargraves, AustraliaSuper is undaunted by the asset's higher risk profile.

“The higher risk/return profile for private equity is a feature of the asset class and we will continue to invest in private equity, venture capital and also in the technology sector in general. These asset classes and the technology sector are strong value creators for members,” he said.

For Pluralsight in particular, Hargraves said the asset was well supported by a number of major global investors, but the impact of the COVID-19 pandemic, volatile macroeconomic conditions, rising interest rates and increasing competition combined to create a very challenging environment for the company.

"The combination of deteriorating sales revenue from corporate America due to cost-cutting and increased debt servicing costs due to higher interest rates resulted in a sharp deterioration in the company's trading performance, prompting restructuring," Hargraves said.

“Although these types of situations are rare, they can occur from time to time and serve to reinforce the benefit of a diversified portfolio.

"AustralianSuper has a rigorous ongoing evaluation process and this investment was continually reviewed as part of that process."

He added that the assessment was fully accounted for, assuring that "there will be no impact on members' future earnings".

Last week, the Australian Securities and Investments Commission (ASIC) announced it would prioritize a review of the growth of Australia's "opaque" private markets, with chairman Joe Longo highlighting the increased risk to market integrity as investor exposure increases .

Earlier this month, a global survey revealed that private lending is gaining popularity among institutional investors, with sovereign wealth funds particularly benefiting from new lending opportunities.

Also this month, an analysis of plans to invest capital in alternatives over the next 12 months showed that private credit is a favorite among investors globally, with around half of investors noting that they intend to increase their allocation to the asset class.

The private lending market was worth about $188 billion in Australia last year, according to the latest EY estimates.