CEO’s Report
Future Fund Chief Executive Officer, Dr Raphael Arndt, discusses the Future Fund’s performance over the past year against a challenging backdrop, and discusses key highlights achieved under the business plan during FY23.
I’m Raphael Arndt, I'm the CEO of the Future Fund. It's a great privilege and a pleasure to come and lead an organisation like the Future Fund.
There are lots of challenges in the world, but for investment people, that's just exciting. It was a really interesting year. The dominant driver was inflation and, coming out of the pandemic, as everyone would know, inflation was high and sticky. That started with supply chain constraints, but it's transmitted now to labour markets and wages.
For the first part of the year, central banks were raising interest rates really rapidly, and that weighed on asset prices. In the second half, the debate started about: where is the end of that cycle? Will rates be cut?
Equity markets are pricing in rate cuts, but actually, real economies are really resilient. The consumer is still spending in a lot of the world, especially in the US, and unemployment is at a decade’s low.
In terms of the investment performance over the year, that was a solid result. Equity markets ran mainly off the back of an expectation that central banks will start to ease interest rates. We're pretty cautious about that view, and we think there's quite a lot of risk to it. We've got a really diversified portfolio. It’s resilient to high inflation and a number of other factors. And so in that context, we think the result is really solid.
We happen to be working on the next evolution of our business strategy right now, and it's a really exciting time to do that. The world is uncertain, we know that, but that creates a great deal of interesting challenges for investment people.
My vision is about how do we keep getting better as a joined-up whole portfolio investor - what do we need to do to support the investment performance? And there's a whole lot of ideas the team has that are starting to come together into the next evolution of our business plan.
During FY23, we made some really solid gains. We hired 78 people, the most ever. We’ve stood up the Future Fund Academy, and now when you join, every one of those 78 people (when they joined) got taught about our culture and how to succeed here. By collaborating and working together, we’ve really made great strides. Now, we are also delivering our technology and data (plan). We developed a new technology strategy, which is designed around supporting our investment performance, which is after all, what we're here to do.
