Govt reduces Future Fund target return parameters
The Federal Government has empowered the Future Fund to trim it sails in the face of what is being predicted to be increasingly difficult global investment market conditions.
The Treasurer, Scott Morrison said the Government had registered a revised investment mandate for the Future Fund which would come into effect from 1 July this year, and reflecting changed global investment market conditions and outlook.
He said since its inception the Future Fund’s returns had grown to exceed the previous long-term target rate but added that actuarial analysis indicated global investment market conditions might make it increasingly difficult for the Future Fund Board of Guardians to achieve current returns without taking on excessive risk.
“We have therefore issued the Future Fund with a new investment mandate, which sets a target return of at least the consumer price index (CPI) +4 to +5 per cent over the long-term,” the Treasurer said. “This is a reduction in the target return of 0.5 per cent.”
Morrison noted that the Future Fund had performed strongly since being established in 2006, achieving returns of 7.7 per cent per annum, exceeding the benchmark return but said the Government supported the view that maximising returns must be balanced against the need to minimise the probability of losses to protect the taxpayer’s investment in the fund.
Recommended for you
Investment solution provider Channel Capital has appointed James Archer as its latest distribution director, joining from Pinnacle Investment Management.
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
Global private markets firm Partners Group has launched an evergreen fund to provide Australian advisers with access to its cross-sector royalties strategy.
