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Australian Future Fund Posts 15.4% in 2012-2013

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futurefundAccording to a news release issued September 2, 2013, Australia’s Future Fund posted a 15.4% gain for financial year 2012/2013 ending June 30th. The return includes a 4.4% gain last quarter.

The gain brings the Future Fund to A$ 88.9 billion (US$ 80.4 billion), realizing a return of 6.2% per annum since its inception in May of 2006.

Mark Burgess, managing director of the Future Fund, notes the performance was, in part, “a result of improved conditions and confidence and the significant degree of policy stimulus being applied across many global markets.” Mr. Burgess and his team also adjusted the Future Fund’s exposure to equities.

In addition, Mark Burgess will be leaving the Future Fund. Informing the board of guardians, Burgess will stay onboard to help facilitate a smooth transition.

In a September 4th press release, Mark Burgess stated, “I appreciate the support I have received from the Board and my colleagues in the Agency and the areas that we have been able to develop in my time with the Fund. With recent strong performance and the Fund now fully invested, I have decided to return to the private sector to bring my experience to that field.”

The infographic below reveals the change in strategy the Future Fund took from from 2012 – present.

Portfolio at 30 June 2012 Target Allocation at 30 June 2013 Actual Portfolio at 30 June 2013
Listed Equity 32.90% 33% 40.60%
Private Equity 6.40% 8% 7.30%
Tangible Assets 12.80% 16.50% 14.10%
Alternative Assets 19% 17.50% 15.60%
Debt 18.30% 17.50% 16.60%
Cash 10.60% 7.50% 5.80%

Data may not sum due to rounding

The Future Fund’s mandate is to return CPI + 4.5%-5.5% over the long term per annum. It has beaten that benchmark on a rolling three year basis since September of 2011. The success contrasts financial years 2007/2008 and 2008/2009 when the fund severely underperformed its benchmark. CPI for those years was 4.5% and 1.5% respectively and the nominal return for those years was 1.5% and -4.2% respectively.

Mergermarket Gets Ready to be Sold

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Private equity firm BC Partners hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to advise on the sales of Acuris. Acuris is a collection of financial news and data sites, which includes Mergermarket, Dealreporter, and Debtwire. In 2017, BC Partners sold around a 30% stake in GIC Private Limited.

Before the rebranding to Acuris, Mergermarket was part of The Financial Times Group until 2013 when it was sold off to BC Partners.

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Why Japan Post Sees Promise in Aflac

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Aflac Inc. is an American insurance company founded in 1955. The company is the biggest provider of supplemental insurance in the United States. Aflac also has major operations in Japan.

In December 2018, Japan Post Holdings (JPHLF) signaled it was spending US$ 2.64 billion for a 7-8 % stake in Aflac. The goal is that, in four years time, Aflac will become an affiliate of Japan Post. Japan Post hopes to accomplish this by becoming the largest voting shareholder of the company. The world’s 13th largest company, with 400,000 employees, Japan Post needs to expand to chase further growth, mainly because Japan Post expects the postal business to decline. Diversification is seen as the optimal route to long term stability for the holding company. Japan’s economy is worrying. Japan’s aging population means that many insurance companies are facing a shrinking customer base, Japan Post settled on a plan to expand overseas.

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RDIF and Development Agency of Serbia Agree to Explore Joint Investments

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The Russian Direct Investment Fund (RDIF) and the Development Agency of Serbia, also known as Razvojna agencija Srbije, reached an agreement to work together to identify attractive investment projects to strengthen bilateral economic ties and increase investment flows between Russia and Serbia. Russian capital and businesses are keen on investing in Serbia.

In addition, the two countries signed an agreement to cooperate on civil nuclear energy, according to state-owned Russian reactor builder Rosatom (Rosatom State Nuclear Energy Corporation). Rosatom continues to expand it business of nuclear cooperation deals in a wide number of countries.

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