Future Fund's PE assets grow

Australia’s Future Fund's real estate, private equity and infrastructure assets have increased as its overall assets grow past the A$70bn (€50.6bn; $69.4bn) mark for the first time.

The Australian sovereign wealth fund has made further increases to its “tangible assets” portfolio as well as private equity in the three months to 31 December 2010. The private equity portfolio grew by 0.1 percent, or A$157 million, to A$2.16 billion.

In a portfolio update, Future Fund, which was established in 2006 to assist the Australian government meet the cost of public sector superannuation liabilities, said its assets had grown to A$71.8 billion in the fourth quarter of 2010, an increase of A$2.45 billion.

The growth came as it announced it had returned 3.4 percent for the quarter, giving it a return for the financial year to December of 7.5 percent.

Within its “tangible assets” division, its real estate assets grew by 0.3 percent, or A$388 million, to A$3.82 billion and infrastructure assets by 0.2 percent, or A$244 million, to A$2.95 billion.

The increases came as Future Fund reduced its allocation to cash and debt securities as it meets unfunded commitments. Cash allocation was reduced by 3.3 percent from A$12.17 billion to A$10.9 billion. While its debt securities increased A$237 million to A$12.98 billion, its allocation actually fell by 0.5 percent.

“During the quarter the board of guardians continued to build towards its target asset allocation, adding to its investments in the equities, tangible assets – property and infrastructure and timberlands – and alternative assets categories while refining and modestly reducing its debt programme,” the fund said in a statement on the quarterly figures.

“Further reductions in cash holdings will occur as existing unfunded commitments are drawn down and additional opportunities are identified.”