This fund had over $30billion in cash to find a home. I think this home may be infastructure. Lets hope we can survive at present, because the future seems good for this asset class. The outlook for the Future Fund per the October AGM is posted below.
"Having settled on a long term asset allocation that reflects the risk and return requirements of our mandate, we have begun to build the target portfolio. While starting this work, we decided during the year to adjust the implementation of the program. We slowed our equities program and prioritised development of our private equity, infrastructure, property, debt and alternatives programs. As a result we are wellpositioned to build the target portfolio and take advantage of emerging opportunities.
This said, it will take some time before the allocations in our target portfolio are achieved. In November 2008 the Board’s holding of Telstra shares, representing some 16% of the company’s issued capital, will be released from escrow. Thereafter the Board will manage this holding in line with its investment mandate and with a view to its obligations to maximise long term value with acceptable risk and to avoid causing abnormal volatility in the market. At the time of printing this report global financial markets had reached a point of serious stress with widespread lack of confidence and the failure of a number of financial institutions in the United States and Europe. Resolution of the crisis will require government intervention to unwind excessive leverage and risk in the system.
For the Future Fund, the current allocation to cash with lower risk, high yielding Australian securities is a very positive position. As the crisis is worked through, however, the challenge will be to identify with confidence assets within our long term asset allocation which are appropriately priced and free of excessive risk. At some point, as we move from a most unusual environment to more predictable market circumstances, considerable effort will be needed to keep up with widespread opportunities to acquire repriced assets."
BBI Price at posting:
3.2¢ Sentiment: LT Buy Disclosure: Held