Report from
the Chair

I'm Greg Combet, the Chair of the Future Fund Board of Guardians.

Well, I'm really pleased with this year's results. They’re very strong results of course, we've recorded investment performance of 12.2% versus our benchmark target of 6.1% so it's an outstanding result for the 2025 financial year.

But of course, we're long-term investors and I'm also pleased that over the last ten years, we've recorded on average an 8% return versus the benchmark of 6.9% per annum.

So in my first full year as Chair of the Board of Guardians what I've come to appreciate is the quality of the people in the organisation. They're great thinkers, they're very dedicated to the purpose of the organisation, and I think it shows in the results.

This year’s also seen a very important announcement from the Australian Government concerning the Future Fund with the issuing of a new Investment Mandate, and part of that announcement was the statement by the Government that it would defer any drawdowns from the Future Fund until at least 2032–33.

Now that's important for a number of reasons. One, it allows us to continue to focus on long term investing. If we were confronting drawdowns earlier than that we would obviously have to take a different view about the liquidity in the portfolio.

But the other really important part of that announcement is that the Fund can not only meet its original purpose now of funding Commonwealth Superannuation liabilities, it can do that and be an enduring sovereign wealth fund for the Australian people.

So the new Investment Mandate that the Government issued late last year asked the Board of Guardians to consider three national priorities in our investment strategy, and that included the energy transition, residential housing in the domestic economy and infrastructure.

All of these things of course are very important for productivity and economic growth and the Government's asking us to think about that when we're formulating our investment approach. We've embraced that ask by the Government.

So one very important thing to understand about the national priorities that we've been asked by the Government to consider is that it does not impact negatively at all on our investment approach. Portfolio design remains the independent prerogative of the Board of Guardians and the Agency team. When we're looking at the individual assets, we're still seeking appropriate risk-adjusted returns and we are totally focused on our mandate. 

So when the Future Fund was initially established and until quite recently, all of its investments have been done through external investment managers. But the Fund and the people here at the Future Fund now have a scale and a capability that we can potentially do transactions and internally manage assets in the domestic economy ourselves, for example an infrastructure asset. We brought that to the attention of the Government over the past 12 months. They've approved that the Fund can internally transact and manage assets if it makes sense from a cost efficiency standpoint.

Being afforded the right by the Government to internally manage assets does not mean that it derogates from the relationship we have with our existing managers. The investment managers, and the collaboration and the partnership with them is fundamental to the Future Fund's success. And we’d never do anything to compromise that.

ESG issues have long been considered in the investment approach of the Future Fund. What's happened is that we're deepening our approach, we've adopted a Responsible Investment Belief that also takes into account climate risk. We have done that, and in the course of the past 12 months adopted a new Investment Belief about responsible investment, recognising that responsible investment and thinking about the risks of climate change are very important to understanding long-term investment risks and returns.

So the past financial year is my first full year as Chair of the Board of Guardians. Enjoyed it tremendously and looking forward to the period ahead. There's been continuing change on the Board with the retirement of Michael Wachtel after nine years, and Jim Craig has joined the Board of Guardians and he's a person with exceptional investment experience.

I'm feeling very confident about the period ahead, that we've got the Board and the team to meet the challenges of a complex global environment.