The weighting to alternatives are up and cash is way down in the portfolio update published yesterday by the Future Fund.
In the quarter to 30 June, the allocation to alternative assets rose to 15.6 per cent, up from 12.3 per cent in the previous quarter to 31 March. This was part of the fund’s overall increase to alts, rising from 4.6 per cent in Q1 2009-10 to the 15.6 per cent in Q4 published yesterday.
Cash was the big loser, falling from 41 per cent in Q1 2009-10 to 13.1 per cent in Q4.
David Murray, chair of the fund’s board of guardians, said cash was deployed into strategies “consistent with our long-term objective”.
The alternatives program used “skilled managers to take advantage of capital scarcity and market inefficiency through a diverse range of strategies”, he said.
Similarly, property and infrastructure rose from 4 per cent in Q1 to almost 10 per cent of the portfolio in Q4.
The fund’s return for 2009-10 (excluding its Telstra holding) was 10.6 per cent, with Q4’s negative return of 1 per cent reducing the positive returns of the first three quarters.
David Murray added that draw-downs in the private equity program “have been modest, but opportunities are beginning to increase”. It is understood the Fund recently allocated $200 million to local private equity manager Quadrant, which is seeking to raise $600 million for a new fund.
Improving market confidence had boosted performance, Murray said, but “the outlook for global markets remains fragile in the aftermath of the global financial crisis”.