Australia’s Future Fund published a position paper in September with a grand title: ‘A New Investment Order’. It set out a range of themes and contexts that shape the world for a sovereign wealth fund (SWF) investor and what to do about them. “The world today,” the report begins, “is vastly different to how it was when the Future Fund was established in 2006.”
That’s the truth. Back then, when the Future Fund came into being in order to meet the unfunded pension liabilities of the Commonwealth, the Reserve Bank of Australia’s cash rate was 5.75% and nobody had yet heard of the Global Financial Crisis let alone Covid.
But the interesting thing about the Future Fund is that it has always seemed somewhat ahead of the game. Almost from the outset it has been a strong advocate for themes that later became commonplace: with heavy allocations to infrastructure and private equity, and a recognition that the best opportunities can be found in illiquid assets if there’s no pressing need to liquidate.
