Australia’s Wealth Fund Cuts Hedge Fund Investment with Man Group by $1 Billion
Australia’s sovereign wealth fund, the Future Fund, has significantly reduced its investment with hedge fund giant Man Group Plc by about A$1.5 billion (approximately $1 billion) in the first half of this year. This change reflects the fund’s ongoing adjustments amid a shifting financial landscape.
Man Group remains the leading manager for the Future Fund, which boasts a total portfolio of A$225 billion. As of June, Man Group managed A$6.46 billion of hedge fund investments for the fund, down from A$7.93 billion at the end of 2023. Despite the drop, Man Group continues to be a key player in the fund’s unlisted assets.
Future Fund CEO Raphael Arndt noted in a recent update that the fund had executed A$50 billion in changes over the past year to enhance its resilience against fluctuating interest rates and geopolitical risks. He also pointed out the strong performance of hedge fund investments, which now make up around 15% of the fund’s total assets.
In contrast to Man Group’s decline, Boston-based Wellington Management saw its allocation in the hedge fund portfolio increase by A$1.2 billion, reaching A$3 billion. These shifts highlight the competitive nature of investments from one of the region’s largest private market investors, where unlisted assets account for over 40% of the portfolio. Despite these adjustments, the Future Fund achieved a solid 9.1% annual return through June.
In the broader context, Man Group, based in London, is the largest publicly traded hedge fund firm globally, managing over $178 billion. It faced significant outflows of $1.6 billion in the first quarter, marking the highest withdrawal rate in nearly four years, although these outflows were reversed in subsequent months.
The Future Fund is required to disclose its investment holdings every six months due to new regulations aimed at aligning transparency with Australia’s A$3.9 trillion pension industry. As scrutiny on unlisted assets increases, the Future Fund’s strategic adjustments reflect both challenges and opportunities in the investment landscape.