Australia's Sovereign Wealth Fund - With Ben Samild, Deputy CIO of Future Fund

In 2002, the Australian Federal Treasurer, Peter Costello, commissioned the Australian Treasury to look at the long-term issues facing the nation and how adequately current generations were preparing for future ones. The message was bleak; “Australia’s ageing population would put immense stress on public finances, especially on health and aged care spending, over the next four decades”.

To help address this, the Future Fund was created, and it now looks after six public asset funds (totalling AUD $243.5bn of AUM, as of 31/12/22).

So in the second episode of our Super Allocator Miniseries, Ben Samild, Deputy CIO of Future Fund, explains its mission and strategy, including Future Fund’s mandate to achieve CPI + 4-5% returns per annum.

He explains the “total portfolio approach”, why they locate portfolio managers close to another, their approach to external manager selection, and why in the words of their former CEO that “too many institutional investors arbitrarily filled pre-determined asset class buckets with too many average quality assets in the name of diversification…risk management at its worst!“

From commodities to FX, from concentration to ESG issues, this is a compelling conversation that crosses borders and asset classes, and challenges some conventional thinking.

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TOPICS:
0:00 - Introduction
1:45 - History of Future Fund
3:43 - Ben's Background
7:15 - Overview of Future Fund
9:02 - Investment Aims
11:28 - Portfolio Approach
16:45 - Concentration & Risk
20:20 - Currency Considerations
23:32 - A New Investment Order
27:17 - Identifying External Managers
30:50 - Geographic Factors
33:12 - Agile Decision Making
37:55 - Talent & Employee Retention
40:19 - ESG Considerations
44:01- Dealing with Setbacks
46:20 - Information Overload
48:43 - Conclusion

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All content on the Money Maze Podcast is for your general information and use only and is not intended to address your particular requirements. In particular, the content does not constitute any form of advice, recommendation, representation, endorsement or arrangement and is not intended to be relied upon by users in making (or refraining from making) any specific investment or other decisions. Guests and presenters may have positions in any of the investments discussed.