future fund sell down, page-41

Just to clear up some of the bizarre misconceptions in this thread from today's australian:

THE Future Fund will not sell any more Telstra shares for at least another six months, the fund's chairman, David Murray, says.

Mr Murray confirmed yesterday that Thursday's sale of 684 million Telstra shares was subject to a six-month lock-up period to ensure there would be an orderly market in the stock.

"We want there to be an orderly market for Telstra shares and we feel we have done our best," he told The Weekend Australian.

"You have got to give other investors some comfort that you are not going to sell out from under them." But Mr Murray said it was still a seller of Telstra shares "over the medium term".

"Anyone can tell from our mandate that we can't hold that size holding in one asset," he said.

Mr Murray also revealed that the fund had sold a larger than expected amount of Telstra shares in the deal because of strong market demand.

The fund plans to use the $2.4billion in proceeds from its successful Telstra sale to increase investments across its $58bn portfolio.


Its long-term asset allocation model is to have 35 per cent in equities, 30 per cent in so-called tangible assets like infrastructure and property, 20 per cent in debt instruments and 15 per cent in other asset classes.

Goldman Sachs analyst Christian Guerra said "the fact the deal was upsized shows the strong demand for the stock, which is a big positive".


RBS analyst Ian Martin noted the Future Fund still owned 10.5 per cent of the stock, just above the threshold requiring a shareholder vote on any related party deal between the Future Fund and the government on, say, the NBN.

One fund manager, who declined to be named, said: "On the one hand the sale removes a degree of overhang but, on the other, everyone who wanted the stock now has it, so that means natural buying will dry up."

The sale, the biggest single block trade in Australian history, was the result of some two months planning by the Future Fund.