Statement by David Neal, Chief Executive Officer of the Future Fund, to the Senate Finance and Public Administration Committee
Budget Estimates, 23 May 2018, Parliament House, Canberra
In April we released our regular update on the performance and positioning of the five funds for which the Board is responsible. I will provide a short summary of the key points.
The Future Fund continues to make good progress in pursuit of its objective to strengthen the government’s long-term financial position. The Fund now stands at $141bn, with investment returns adding over $80bn to the original contributions.
At 31 March 2018 the Fund generated a return of 8.5% pa over the last 10 years, exceeding its target benchmark return of 6.7% pa.
Indeed in our public release we reported that the Fund exceeded its target return over all time periods to 31 March.
At the end of March the Medical Research Future Fund stood at just over $7bn. The Fund is performing in line with its mandate and we continue to diversify its portfolio.
The DisabilityCare Australia Fund stood at $10.4bn at the end of March. The two Nation-building Funds, the Education Investment Fund and the Building Australia Fund, each stood at $3.8bn. We continue to invest these funds in accordance with their low risk mandates.
In summary, the Future Fund Board of Guardians invests $166bn across the five public asset funds for the benefit of future generations of Australians.
We are progressing a number of organisational priorities to sustain our success into the future. This includes a focus on improving technology, productivity and efficiency and developing our team, recognising that the collective capability of our staff will always be at the heart of our success.
Together, these priorities will help us respond to the growth in number and value of funds we are responsible for, growing competition for attractive investment opportunities and the power of data to better manage and analyse opportunities and enhance risk management.
To support this work, we have made some changes to our structure. The changes, announced in March 2018, further strengthen our investment, technology and risk functions as the organisation matures and goes into its second decade.
While there is a lot of work underway to position our organisation for the future, our team remains sharply focussed on its investment objective.
I welcome your questions.