FYI | Jan 11 2007
By Chris Shaw
Australia’s Future Fund, established by the Government to meet its unfunded superannuation liabilities, has not even begun investing, but already the fund’s value is higher than had been expected.
As a holder of around 17% of the issued capital of Telstra (TLS) the Fund has benefited from the recent rally in the stock, but it has also gained via the stronger than expected interest in the T3 sell-off, which meant it received a larger contribution from the sale proceeds than had been factored into earlier estimates.
Proceeds are now estimated at around $15.5bn, almost double the amount originally expected to be raised from the issue. This is good news for the Fund overall, Macquarie estimating the total value of the Fund’s assets stands at around $56.7bn following a further $14bn injection by the Federal Government and the upcoming transfer of the Telstra shares and issue proceeds.
As a result, the broker suggests the Fund’s assets may fully match unfunded superannuation liabilities of $120bn by 2011/2012, almost a decade earlier than the original target of 2020 set by the Federal Government when it established the Fund.