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Alternative Market Briefing

Australia`s $59.9bn sovereign wealth fund dramatically lifted alternatives allocation last six months

Friday, February 13, 2009

From Komfie Manalo, Opalesque Asia: According to Sydney-based Liptak Hatfield Advisers, Australia's $59.9bn sovereign wealth fund - the Future Fund - dramatically lifted its allocation to alternative investments in the last six months of 2008.

The fund now has $1.926bn in alternatives, compared to just $63m in June 2008, said the SWF’s latest portfolio update. The fund’s targeted weighting to alternatives is 15%, or $9bn, making it the largest alternatives investor in Australia.

In its annual report released before the end of 2008, Future Fund said its alternatives program would focus on “accessing special opportunities funds seeking to invest in the increasingly distressed conditions in the global credit markets.”

The fund returned minus 8.49% in 2008, well above the average Australian pension fund return, due mostly to its 46% weighting in cash.

On Tuesday, Australian papers reported that the fund was looking for a responsible investment manager and head of its information technology.

David Neal, the fund’s chief investment officer, said the manager will help the company to maximize returns with acceptable risk.

He said the head of information technology would establish and lead the IT function for the organization.

The decision of Australia’s largest fund to increase its alternatives portfolio came as the Australian Fund Monitors announced that the Australian hedge funds jumped 0.7% i......................

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