Just like the Future Fund, the recipient of its first active equity mandate since 2017 thinks markets are going to look pretty different over the next decade. And asset management businesses themselves are going to have to do things differently to keep up.
Changing dynamics in the Australian asset management industry gave the Future Fund access to a manager it might ordinarily have been forced to walk away from, and it expects to find plentiful (and sustainable) alpha in small caps.
The Future Fund might make a bigger contribution to the budget if it was liquidated, according to the Centre for Independent Studies, which argues that its returns haven’t been that impressive even as its benchmark gets harder to beat.
Australia’s sovereign wealth fund and New Zealand Super have topped this year’s Global SWF governance, sustainability and resilience rankings, while institutions the world over are rethinking their investment strategies amidst market ructions.
The Future Fund is thinking of restarting its active equity programs with investments in small caps, according to CEO Raphael Arndt, but commentators are split on whether it will find the returns it needs.
While funds have backed affordable housing as an asset class, nation-building initiatives like the Housing Australia Future Fund (HAFF) still need tweaks to create certainty for institutional investors.
Magellan has flagged acquisitions and the addition of alternatives strategies as part of a five-year plan to reclaim the $100 billion plus heights it last scaled in 2021.