future fund

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."