The Future Fund has been recognised in AsianInvestor's 2020 Insitutional Excellence Awards.
The Awards recognise the region's leading asset owners in terms of their capabilities and investing prowess across Asia Pacific.
Recognising the Future Fund in the Alternative Assets Investing category, AsianInvestor acknowledged the Future Fund’s sophisticated approach to alternative assets investing. It went on to praise the organisation’s ongoing efforts to refine its alternative assets investing exposure, noting in particular its willingness to divest from alternative assets that were assessed as being fully valued from 2019 and into 2020, as part of an ongoing effort to maximise returns and free up capital for new opportunities.
‘The sign of a mature asset owner is not that it is always seeking to expand an asset class. Sometimes it is when it decides it is time to cash in strongly performing assets or reduce allocations that appear to be getting concerningly risky. Over the past year and more, Future Fund has been an example of the latter,’ noted AsianInvestor in announcing the award.
Dr. Raphael Arndt, Chief Executive Officer of the Future Fund, said:
‘Thank you to AsianInvestor for recognising the Future Fund’s sophisticated approach to alternative asset investing. We are proud to be recognised among our regional peers as a leading investor.
‘As Australia’s sovereign wealth fund, the Future Fund’s mandate is to deliver strong long-term returns without taking excessive risk. Our role has never been more important than it is today. Created in 2006 to strengthen the Australian Government’s long-term financial position, the Fund is now at its highest value ever at $171bn.
‘As a sophisticated institutional investor, our dynamic investment strategy uses diversification and our long-term investment horizon to navigate the extreme market volatility we have seen over the last year. This is reflected in the 9% pa returns over 10 years and the $110bn that investment returns have added to the original contributions to the Fund of $60.5bn.
‘The Future Fund Board of Guardians will continue to focus on maintaining flexibility and strategically balancing risk while generating strong long-term returns for all Australians.’
Ms Sue Brake, Chief Investment Officer of the Future Fund, said:
‘The Future Fund seeks genuine diversification that achieves greater balance in portfolio construction while allocating risk in a flexible and dynamic manner. We want to be as efficient as possible at turning risk into return, whilst ensuring a relatively high degree of flexibility in the current investment environment.
‘In investing for the long-term, we are very conscious of avoiding excessive risk, as per our mandate – and we regularly review our portfolio composition to ensure our exposures are as attractive - or more attractive - than opportunities we are looking at that aren’t in the portfolio.
‘When assets become mature and the expected look-forward return has decreased, we may choose to sell them to generate flexibility and re-deploy the capital into new opportunities. A recent example has been the pre-COVID sale of our stake in Gatwick Airport and the purchase of a stake in Canberra Data Centres. This dynamic investment approach continues to serve us well and has helped ensure we’re weathering the COVID storm and protecting the portfolio as effectively as possible.
‘We’re excited about the challenges and opportunities facing us in the months and years ahead as we strive to build on the success we have achieved to date.’