Asset owners, fund managers and central banks alike are putting an increasing focus on infrastructure, with the asset class tipped for a big rise in prominence in the coming years.
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Reporting its first quarterly loss since 2012, the Australian fund says returns on risk assets are no longer sufficient and is worried about the ability of monetary authorities to respond to future weakness.
After years of above-target performance, Australia's Future Fund and New Zealand Super have been de-risking their portfolios amid a worsening investment outlook.
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The fund's target cash weighting was 10%, but it raised the level to near-20% due to strength of returns and resultant selling down of assets. It expects future returns to be lower.
Gordon Hagart, who spent four years at the Future Fund, is set to join the Australian Council of Superannuation Investors. The Future Fund has already begun to seek his replacement.
Despite reducing its exposure to hedge funds, the Australian state investor retains a substantial allocation to the asset class – but is especially keen on equities right now.
David Neal, CIO of Australia’s Future Fund.
Australia’s sovereign wealth fund is building up its emerging markets allocation and capabilities. It also aims to have more direct involvement in its private equity investments.
