A$67bn Future Fund RE allocation rises 3% in a year

A focus on alternative assets by Australia’s A$67bn Future Fund led to an increase in real estate exposure from 1% to 4% in the year to March 31 2010. The state wealth fund also increased its exposure to infrastructure investments.

Future Fund, the A$67.62 billion (€46.32 billion; $61.6 billion) Australian state wealth fund, increased its exposure to global real estate over the last year to 4 percent of total assets as of March 31 2010.

The increase from one percent exposure to the sector at the same time last year reflected an increase in its assets under management to A$2.58 billion from A$529 million a year ago.

In addition to the real estate allocation increase, Future Fund also increased its exposure to infrastructure investments to 3.2 percent from 2.5 percent – an increase to A$2.066 billion from A$1.267 billion.

Overall, Future Funds’ assets under management grew from A$58.04 billion at the end of last March. Global equities and debt securities account for the fund’s biggest sector allocations.

David Murray, chair of the board of guardians at the fund, established by the Australian government’s Future Fund Act 2006 to assist it in meeting the cost of public sector superannuation liabilities, said in a statement marking its first quarter performance, that the growth was inline with plans to develop its portfolio in line with its long term mandate.

He said: “We have continued to build out our infrastructure and property sectors as well as increasing investments in the Alternatives category through a diversified exposure to absolute return strategies. This has been funded through a modest reduction in the allocation to debt securities and listed equities.”

Future Fund’s intention to expand its real estate assets were exemplified last year when it reportedly committed $1 billion to Brookfield Asset Management’s Brookfield Real Estate Turnaround Consortium – an investment club put together by Brookfield with $5.5 billion of aligned investment capital. Other investors in the club reportedly include China Investment Corporation and Singapore’s GIC.