Marion Rae
(Australian Associated Press)

Australia’s Future Fund agency will nearly double its 70-strong investment team to meet the challenges of significant changes in global markets.

Future Fund Management Agency chief executive Raphael Arndt told a Senate estimates hearing the federal government has met its request to ditch a cap on recruitment and invest in technology.

The Future Fund is sitting at a record value of $179 billion, with a 10-year return of 9.1 per cent.

“To be able to meet our mandates in the period ahead we need to ramp up our activity,” Dr Arndt said.

“We need more staff to do that.”

The intention is to go to a total headcount of 350, from almost 200 now, but he conceded they may fall short of that target in the next 12 months.

Dr Arndt said it was hard to predict whether their record returns would continue without the boost, given an investment landscape of low interest rates and market upheaval that has been accelerated by COVID-19.

“The world is fundamentally changing and investment markets are changing with it,” he said.

Specialist fund managers will be added in Sydney and Melbourne.

He said unprecedented turbulence has moderated, and investor confidence is returning.

“Economies and markets have continued their recovery, driven by the deployment of vaccines, quantitative easing, and fiscal stimulus around the world,” Dr Arndt said.

“Policy settings continue to support markets for the time being but this is priced into assets and unwinding these measures will be a complicated exercise.”

A failure to reduce stimulus in a timely way could fuel inflation, which markets are starting to focus on, he said.

The money the Future Fund makes for the taxpayer helps the government cover the cost of public service superannuation, as well as medical research, disaster and drought relief, and Indigenous projects.