The Future Fund has promoted internally to fill its chief investment officer role, while passing the responsibility for portfolio risk setting to another role.
Dr Raphael Arndt, the fund’s former head of infrastructure and timberland, is now CIO, while Stephen Gilmore, the fund’s current head of investment strategy, will take on responsibility for monitoring total portfolio risk settings while keeping focus on portfolio design and the macroeconomic and market environment.
Arndt will have overall responsibility for leading the investment team in developing the research, due diligence and selection and monitoring processes for assets and investment managers.
Both will report to David Neal, the Future Fund’s managing director.
Neal identified Raphael’s “commercial and leadership skills” as a key factor in his promotion, while praising Gilmore’s “rigour and insight”.
He described the split of responsibilities between the two as enhancing the fund’s ability to “interpret the broad investment environment and exploit specific insights from each asset class.”
He added: “The ability to bring these perspectives together and collaboratively develop investment ideas is a hallmark of our investment approach.”
Neal listed Arndt’s credentials, as the role he had played in developing the fund’s investment strategy and process over the past seven years.
“He is the ideal person to foster the collaboration and contest of ideas that is central to our investment process,” said Neal.
In July, Arndt made a hard hitting speech to the ASFA Global Investment Forum in Sydney, where he said the infrastructure sector would struggle to reach its potential until it was more transparent about performance.
Such transparency, he said, would reveal how much returns were derived from bond yields, inflation expectations or GDP growth.
“What if you could assess whether your managers were adding any value over and above those, and other factors which you could buy much more cheaply and in a more liquid form?” he asked.
Gilmore has been given the go-ahead to recruit a senior additional person to provide further depth on investment risk management and reporting capabilities.
A recruitment process for the position of head of infrastructure and timberland vacated by Dr Arndt will now commence and be undertaken in accordance with Australian Public Service requirements. While this process is underway Barry Brakey, head of property, will take on the additional responsibility for leading the infrastructure and timberland team on an acting basis.