Australia's Future Fund makes secondary sale to CPPIB - report

The sale came as the superannuation fund trimmed its private equity allocation and boosted cash holdings, reflecting concerns over increased risk due to changes in lending and public policy.

According to The Australian, interests in Oaktree Capital Management products accounted for close to half of the sell-down, but Future Fund did not completely cut its relationship with any manager. Existing positions in funds managed by local GPs Archer Capital and Quadrant Private Equity were not exited.

As of December 2015, Future Fund had about 10.4%, or A$12.3 billion, deployed in the asset class. This is down from the 10.8% as of June 2015, though it still represents an increase from the 9.5% allocation at year-end 2014.

Cash reserves rose significantly over the year, from 12.8% to 20.6%. The fund attributed the increase to a rebalancing of its risk exposure, including the reduction in the PE portfolio along with reductions to its Australian and global equities exposure; its holdings in the latter two categories were reduced from 8.8% to 6.5% and from 30.3% to 24.5%, respectively.

Future Fund Chairman Peter Costello indicated that the results are in line with the fund's expectations due to changes in central bank lending policies and the withdrawal of monetary stimulus across markets. He warned that continued volatility and lower prospective returns will require further changes to the portfolio.

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• Topics
• Australasia
• LPs
• Secondaries
• Secondaries
• Future Fund
• Canada Pension Plan Investment Board (CPPIB)
• Secondaries
• LPs
• Australia