Future Fund repositions portfolio for ‘stickier inflation’

Investment Magazine

Australia’s sovereign wealth fund, the Future Fund, is bullish on private equity and renewable energy, but admitted it will find it “extremely difficult” to achieve its mandate of CPI plus four per cent over the next five to ten years. The director of the Future Fund’s CIO office, Craig Thorburn, said he and his colleagues “are believers in…higher-than-expected, stickier inflation” in the near term. “Our big concern is actually hitting that mandate over a consistent five to ten-year period, is going to be extremely difficult,” Thorburn told the Investment Magazine Fiduciary Investors Symposium in the NSW Blue Mountains last month. 

As a result, the fund has repositioned its portfolio against “a raft of different structural changes,” Thorburn said. Around $50 billion has been moved to a range of new strategies and sub-themes, such as alpha-seeking investments in private equity. “We’re still attracted to private equity, we’re still attracted to the co-investment program that we’ve developed through that, and enhancing that co-investment activity across other asset classes, like private credit, infrastructure…as well as listed equities, to name but a few,” Thorburn said. The Future Fund is the “second biggest investor in the renewable energy space in this country, behind [Andrew] ‘Twiggy’ Forrest,” Thorburn said.

The rest of this article can be found at investmentmagazine.com.au.