Australia's Future Fund contiues to ramp up PE exposure

Future Fund announced a return of 15.4% for the 2015 financial year, taking the value of the sovereign wealth fund to A$117.2 billion. Since it was established in 2006 with a A$60.5 billion injection from the government, the fund has generated investment returns of A$56.7 billion, or 8% per annum. Returns on a three-year and five-year basis stand at 15% and 11.9%, respectively.

Peter Costello, Future Fund's chairman, noted that stimulation policies pursued by central banks have helped drive strong rises in asset prices in recent years. "However, stimulatory policies cannot be sustained indefinitely and it seems likely that generally returns in the future will be lower than in recent years," he added.

Future Fund is mandated to target a return of 4-5-5.5% above inflation over the long term with acceptable but not excessive risk. It was set up with a brief to reach A$140 billion in size by 2020 in order to assist the government in meeting the cost of public sector superannuation liabilities.

In addition to private equity exposure, the fund has 6% of its assets invested in property, 7.5% in infrastructure and timberland, and 12.7% in alternative assets or hedge funds. There is also 9.8% in debt securities, 6.8% in Australian equities and 27% in international equities.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• LPs
• Australasia
• Performance
• LPs
• Australia
• Future Fund
• Performance