Future Fund MD Resigns to Return to the Private Sector

Another day, another public sector investment manager has resigned to return to the private sector.

(September 5, 2013) – The Australian Future Fund’s Mark Burgess has handed his notice in after two years at the A$89 billion fund.

Burgess, managing director and president of Australia’s Future Fund Management Agency, told the board of his intention to leave the organisation on September 3.

The agency is responsible for the investment strategy and implementation of the Future Fund, a sovereign wealth fund designed to help meet the government's future liabilities for the payment of superannuation to retired civil servants.

Burgess will remain in his role for the foreseeable future to help “smooth the transition” to a new leadership, according to a statement from the fund.

Under Burgess’s tenure, the fund grew from A$75 billion to more than A$89 billion. The Future Fund also manages assets totalling A$11.4 billion from three other government funds, taking total funds under management to more than A$100 billion.

Burgess expressed his desire to return to the private sector in his resignation letter, though where he will be going is still a mystery.

The chairman of the Future Fund Board of Guardians David Gonski gave thanks to Burgess for his guidance and support during his time at the fund.

“Mark has played an important role in leading the Agency through its next stage of development and in the implementation of a number of important initiatives,” he said.

“I respect Mark’s decision to return to the private sector at this time and we look forward to announcing a replacement to his position as the Fund enters the next phase of its development.”

The Future Fund’s asset growth and the strategies used have grabbed the headlines in recent months: the fund reportedly spent A$875 million on a 30% stake in Australia’s Perth airport earlier this year, a price that came in 43% higher than an independent valuation made in June last year.

“If you are a long-term investor, infrastructure provides long-term, stable, inflation-related income flows that are valuable. A lot of assets are providing just that,” CIO David Neal told the Australian Financial Review.

“We think in general the prices being paid reflect the cash flows we expect to receive.”

The Future Fund also owns a 17% stake in London’s Gatwick Airport.

Burgess isn’t the only public servant to step down in favour of a role in the private sector in recent weeks. Tim Walsh, the former investment head of New Jersey’s $74 billion pension fund, stepped down last month after taking a job at Chinese real estate firm Gaw Capital.

Related Content: “No Infrastructure Bubble,” Says Aus Future Fund and When Infrastructure Investments Sour

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