Australia’s Future Fund hikes private equity allocation

The sovereign fund now has A$6.6 billion deployed in the asset class, exceeding the real estate allocation, which fell from 6.4% to 5.6%. On the illiquid side, the substantial beneficiary of Future Fund's dynamic portfolio management was infrastructure and timberland, which now account for 8% of the portfolio, up from 5.9% in September 2012.

Future Fund also significantly increased its exposure to develop markets equities while reducing allocations to emerging markets equities, Australian equities, debt securities and hedge funds.

The fund has returned 8.2% per annum on a five-year basis and 9.7% per annum over three years, exceeding its baseline long-term target in each case.

"Across economies, policy efforts to lift economic activity have been maintained and markets broadly have continued to responded positively. We have adjusted the portfolio to take advantage of this strength, repositioning over the 12 months to attractively valued assets while also selectively selling assets we deem as becoming fully priced. Of note has been our shift toward listed equity, infrastructure and private equity," said Mark Burgess, the fund's managing director, in a statement.

Since it was established in 2006, Future Fund has received contributions from the Australian government totaling A$60.5 billion. It was set a target size of A$140 billion by 2020 to assist the government in meeting the cost of public sector superannuation liabilities.

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• Topics
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