MEDIA RELEASE
TCorp welcomes the NSW Government’s green light to create a new $47 billion OneFund
Published 18 June 2024
Sydney, 18 June 2024 – TCorp, the investment and financial management partner of the New South Wales (NSW) public sector, today welcomed the NSW Government’s decision to bring together a number of separate state investment funds to create a $47 billion OneFund.
Combining the funds, which include the Debt Retirement Fund, NSW Infrastructure Future Fund, Social and Affordable Housing Fund, Snowy Hydro Legacy Fund, Treasury Managed Fund and Long Service Corporation funds, is expected to enable higher investment returns for each of the funds as well as delivering operational efficiencies in their more streamlined operation.
OneFund will be targeting an investment return objective of CPI + 4.5% per annum over rolling 10-year periods, which is consistent with the state’s long-term investment horizon and risk appetite. To achieve the investment return objective, OneFund will deploy a moderate increase in risk across the individual funds but will remain well within the NSW Government’s risk appetite.
The new structure will be managed by TCorp and becomes effective as of 31 August 2024.
TCorp Chief Investment Officer Stewart Brentnall said: “We support the NSW Government’s decision to combine the funds which will provide an opportunity to optimise the state’s balance sheet to generate higher returns over the long term.
“Managing disparate funds as one is the right decision and will deliver a significantly better combined outcome compared to the sum of the individual funds.
“Under the OneFund approach, the funds will benefit from pooling under one new cost-effective structure and from the removal of portfolio investment constraints. This will enable higher returns for each of the funds over the longer term, through more efficient use of risk.
“Importantly, we believe this new combined structure achieves 5 important outcomes. It will reduce concentration, liquidity and asset specific risks, minimise the prospect of selling assets during a period of negative returns, and enable economies of scale in the management of assets.
“This is an exciting initiative by the NSW Government, and one we believe has the potential to generate a significant financial impact for the state.”
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Media contact:
mediaenquiries@tcorp.nsw.gov.au
