Future Fund delivers annual return of 9.1%
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The news: The Future Fund has revealed a 9.1% annual return, worth about $18.8 billion, in returns the executive has described as "very good" given the challenging environment globally.
The numbers: The sovereign wealth fund is now worth $224.9 billion. Since it was created in 2006, returns have contributed $165 billion to the fund.
The 10-year return is equivalent to 8.3% per annum, which is above the 6.9% mandated return.
The total funds under management by the Future Fund board are now worth $289.4 billion, when including the relatively new Housing Australia Future Fund.
The context: This is the first set of results under newly installed chair Greg Combet, who left the Net Zero Economy Agency for the role in June replacing Peter Costello. He used the portfolio update to reaffirm the importance of the energy transition for investments in this new role.
What they said: "My priority as chair is to maintain the focus on delivering the investment mandate of CPI plus 4% to 5% per annum over the long term while managing risk," Combet said in a statement.
"In taking up my role I have been impressed with the culture of the organisation, the capability of the team, and the investments of the fund in Australian infrastructure assets such as airports, a major port, renewable energy and telecommunications and data centres," he said.
“These are important investments in Australia’s future. Building on these will be a priority for me, particularly given the investment opportunities in the energy transition."
Future Fund CEO Raphael Arndt said in a statement that the return result was "very strong" given the economic environment.
“In a year where equities were the only strongly performing traditional asset class, many of our positions, and in particular our hedge fund portfolio, really delivered," Arndt said.
"Over the past four years the equivalent of the full value of the portfolio has been turned over to align the portfolio with our revised thinking. $50 billion of changes were made in the past year alone."
The source: Future Fund media release
