Australia’s Future Fund, one of the country’s largest institutional investors, has concluded its inaugural direct investment in Canberra Data Center (CDC), acquiring a 24.1% stake in the Australian company.
Future Fund Chief Investment Officer Raphael Arndt told IPE Real Assets about the purchase: “We have had exposure to data centers through our listed and private equity portfolios for some years. It’s a space we’ve observed developing, and we have been conducting research for some time.”
CDC launched in 2007 and operates four data centers around the country.
Arndt told IPE: “The business is expanding and investing in new facilities and we’re looking forward to supporting that growth.” The deal was concluded on December 23 and represents “a high-quality asset that takes advantage of the powerful secular trend of data growth and cloud computing,” Future Fund CEO David Neal said in a statement.
The Future Fund joined the situation as a co-owner of the business alongside the Commonwealth Superannuation.
Earlier this week, the $168 billion Future Fund announced it had generated its best annual returns the sovereign wealth fund had seen since 2015, raking in 14.3%. Its 10-year return of 9.9% per annum exceeds its benchmark of 6.4% per annum.
“Equity markets performed strongly in the last quarter, supported by easy monetary policy. It is important to assess which asset values are supported by earnings as opposed to those supported merely by cheap money,” Future Fund Chairman Peter Costello said.
“Looking forward, a number of risks remain. Global debt levels and demographic pressures will shape economies and markets over the medium to long term. We maintain our long-held view that prospective returns will be lower than recent returns,” Costello added.
The fund has increased its exposure to equities, while lowering its allocation to infrastructure and real estate. Overall, the Future Fund manages six large pools of capital with an aggregate $212.4 billion in assets.
Last year, the fund hired new Deputy CIO Sue Brake to assist the fund’s portfolio strategy functions.
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