Australia's Future Fund creates chief technology officer role

The newly created position is one of several changes to the sovereign wealth fund’s organizational structure. CEO David Neal said they were necessary to help Future Fund “become more nimble and streamlined in the hunt for investment opportunities, the management of the investment portfolio and the creation and use of technology and risk insights.”

The group already has a strategy to take advantage of technological disruption in the global economy, as detailed by CIO Raphael Arndt at the AVCJ Australia & New Zealand Forum earlier this month. Future Fund has A$139 billion ($109 billion) in assets, of which A$17 billion is allocated to private equity and across fund-of-funds, direct GP commitments, and co-investment. Within this, A$8 billion is in VC and small business.

The venture capital portfolio alone amounts to A$2.5-3 billion and the first commitment to an Australian manager is expected in due course. In addition to investing in technology, protocols are in place to explore the disruptive impact of technology in other sectors. A third consideration is applying technology to portfolio management, which means investing in systems that offer more insight into its portfolio in real time, across currencies, geographies, and industries. Future Fund expects portfolio GPs to do the same.

“Our best PE managers are investing in their own businesses, hiring people with an operational background to go into investee companies and drive real operational improvement,” Arndt said, citing a GP that bought a luxury goods retailer and then brought in people with an e-commerce background to update the company’s online offering with real-time analytics.

Future Fund is not alone in advocating the introduction of technology internally. Speaking at the Hong Kong Venture Capital & Private Equity Association’s Asia forum in January, Suyi Kim, head of Asia Pacific at Canada Pension Plan Investment Board (CPPIB), said she expected to see more data and analytics driving investment.

“I believe the next leading generation of GPs are the ones which will adapt and incorporate technology into their investment process and value creation,” she explained. “As with any disruption trend, this may appear a fad at the time, but we will see it become the norm.”

The other structural changes at Future Fund will see Arndt continue as CIO but also assume the duties of the chief investment strategist, with the incumbent, Stephen Gilmore, leaving next month. Another newly created position, head of portfolio strategy, will be filled in due course, according to a statement.

Meanwhile, Wendy Norris, currently head of infrastructure and timberland, will become deputy CIO for private markets, overseeing private equity, property, and infrastructure and timberland. Steve Byrom and Barry Brakey, heads of private equity and property, respectively, will report to Norris. David George, the head of debt and alternatives, will take the role of deputy CIO for public markets.

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