MAN Group, BlackRock and Citadel are among big winners from the giant alternatives portfolio held by Australia’s sovereign wealth fund, which has revealed the size of its mandates for the first time.
The three firms are joined by Silicon Valley venture capital specialists as the largest external managers for the A$223 billion (S$198 billion) Future Fund’s alternative investments, according to documents on its website. The fund had more than 40 per cent of its assets in hedge funds, private equity, venture capital and unlisted infrastructure and property at the end of last year.
The largest mandate is held by London-based Man Group, which oversees A$7.9 billion of its hedge fund assets, followed by San Francisco-headquartered Horsley Bridge Partners, which manages A$4.6 billion for a private equity unit the fund calls venture and growth.
The disclosures follow the government’s introduction of new rules requiring the Future Fund to periodically detail its investment holdings, bringing it in line with the country’s A$3.7 trillion pension industry. The fund confirmed the data this week and said that the information had been uploaded to its website at the end of March.
The new rules fall short of requiring disclosure of details of individual assets that are managed by external parties, and instead only require the manager’s name and total value it oversees. The larger mandates highlight the chunky business on offer from one of the region’s biggest investors, which has held the view that illiquid assets can power out-performance over the long term.
The sovereign wealth fund returned 10.1 per cent in the year to March, according to an update last week, while its 10-year annual return is 8.6 per cent.
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The fund recently detailed its so-called “joined-up whole-portfolio” approach to managing money that sits at odds with how some large investors set and pursue a strategic asset allocation. Instead, it prefers to identify themes and then select the best portfolio expression, regardless of asset class.
“A large investment in direct infrastructure may be seen as a fine standalone opportunity and a good way to manage for rising inflation,” chief investment officer Ben Samild wrote. “But the opportunity will compete with a macro hedge fund strategy; inflation derivative contracts; commodity indices and equity baskets.”
Finance Minister Katy Gallagher said that the more detailed public information about the Future Fund’s investments was a direct result of rules introduced by the government, and “demonstrates our ongoing commitment to transparency and accountability”. BLOOMBERG
