Australia’s Wealth Fund Told to Invest More in Domestic Assets
By Amy Bainbridge
November 20, 2024
Homes in Sydney, Australia. (Brendon Thorne/Bloomberg)
(Bloomberg) -- Australia’s sovereign wealth fund will be required to invest more money in domestic housing, energy and infrastructure projects under a new mandate issued by the government.
The directive accompanies a new statement of expectations for the A$230 billion ($150 billion) Future Fund, according to a statement. The government will also defer any withdrawals from the fund until at least 2032-33, by which time it’s projected to be worth A$380 billion.
“The Australian economy faces major structural shifts, including from the global net zero transformation, technological and demographic change, and global fragmentation,” Treasurer Jim Chalmers and Finance Minister Katy Gallagher said in the statement. “The Future Fund has made clear it can play a prominent role in capitalising on these economic opportunities.”
The new mandate requires the Future Fund to “consider Australia’s national priorities in its investment decisions” which include increasing the supply of residential housing, supporting the energy transition and improving infrastructure. The fund’s primary focus would still be to maximise returns, the government said.
The Future Fund returned 11.9% in the year to Sept. 30, according to an investment update earlier this month. Almost 40% of its portfolio comprises local and global equities and around 10% is held in infrastructure and timberland. Private investments make up more than 40% of the fund’s overall assets.
The government’s “priority areas are aligned with the Future Fund’s thinking as set out in its position papers and consistent with its investment focus on seeking more local currency exposure and protection against sustained higher inflation,” Future Fund Chair Greg Combet said in a separate statement.
©2024 Bloomberg L.P.
(Bloomberg) -- Australia’s sovereign wealth fund will be required to invest more money in domestic housing, energy and infrastructure projects under a new mandate issued by the government.
The directive accompanies a new statement of expectations for the A$230 billion ($150 billion) Future Fund, according to a statement. The government will also defer any withdrawals from the fund until at least 2032-33, by which time it’s projected to be worth A$380 billion.
“The Australian economy faces major structural shifts, including from the global net zero transformation, technological and demographic change, and global fragmentation,” Treasurer Jim Chalmers and Finance Minister Katy Gallagher said in the statement. “The Future Fund has made clear it can play a prominent role in capitalising on these economic opportunities.”
The new mandate requires the Future Fund to “consider Australia’s national priorities in its investment decisions” which include increasing the supply of residential housing, supporting the energy transition and improving infrastructure. The fund’s primary focus would still be to maximise returns, the government said.
The Future Fund returned 11.9% in the year to Sept. 30, according to an investment update earlier this month. Almost 40% of its portfolio comprises local and global equities and around 10% is held in infrastructure and timberland. Private investments make up more than 40% of the fund’s overall assets.
The government’s “priority areas are aligned with the Future Fund’s thinking as set out in its position papers and consistent with its investment focus on seeking more local currency exposure and protection against sustained higher inflation,” Future Fund Chair Greg Combet said in a separate statement.
©2024 Bloomberg L.P.
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