Annual
highlights

Each year, the Australian Government makes $100 million available through the Future Drought Fund (FDF) to support initiatives that help farmers, communities and regions prepare for and adapt to drought. Our role is to manage the FDF’s investments in line with its legislated Investment Mandate, balancing risk and return to preserve capital and generate sustainable long-term returns.

The FDF demonstrates the link between long-term investment performance and tangible outcomes, supporting programs that strengthen communities, improve productivity and build resilience across regional Australia.

This impact can be seen in programs delivered across the country, including the Regional Drought Resilience Planning Program, the Farm Business Resilience Program and the Strengthening Drought Resilience on Country Grant Program.

Recognising that there is no one-size-fits-all approach to building drought resilience, the Regional Drought Resilience Planning Program supports communities to develop locally led plans that strengthen resilience, improve climate adaptation and help guide future investment priorities.

The Farm Business Resilience Program provides farmers and land managers with practical skills and knowledge to manage drought and climate risks, strengthen their businesses and support long-term decision-making.

Delivered in 2025–26, the Strengthening Drought Resilience on Country Grant Program places First Nations leadership and knowledge at the centre of building resilience to dry times, supporting place-based, First Nations-led initiatives.

Together, these programs demonstrate how the FDF converts investment returns into practical outcomes that help communities prepare for an uncertain future. By providing a reliable source of long-term funding, the FDF supports initiatives that strengthen productivity, sustainability and resilience across regional Australia, helping communities adapt to a changing climate.

The three national priorities are:

• Supporting an energy transition as part of the net zero transformation of the Australian economy
• Increasing the supply of residential housing in Australia
• Delivering improved infrastructure located in Australia.

Across housing, energy transition, and infrastructure, our investments in these priority areas reflect a common approach: deploying patient, long-term capital in areas of strategic importance to Australia’s future, while delivering strong risk-adjusted returns.

Over the past year, we have strengthened our focus by building capability across the organisation and directing capital to investments that support both our long-term risk and return objectives and broader economic outcomes.

Supporting the energy transition

We continued to support Australia’s transition to a lower-emissions economy – an example of which is through our investment in Tilt Renewables (Tilt), one of the country’s leading renewable energy operators.

During the year, we made a further investment in Tilt through the acquisition of a portion of AGL Energy’s minority stake, increasing our ownership interest to 43.4%.

Tilt also reached a final investment decision and commenced construction on two wind farm projects, Palmer Wind Farm in South Australia and Waddi Wind Farm in Western Australia.

At 288MW, Palmer Wind Farm will generate enough energy to power up to 142,000 South Australian homes, and at 108MW, Waddi Wind Farm will deliver enough energy to power up to 68,000 homes.

These projects take Tilt to 2.3 GW of generating capacity in operation or under construction, and highlight the scale of investment required to meet Australia’s renewable energy needs.

Tilt now has 12 operational wind, solar and battery assets, two wind farms under construction, and a substantial pipeline of additional assets under development. These investments build on our long-standing commitment to supporting the energy transition through ownership and development of large-scale renewable energy infrastructure.

Increasing housing supply

This year, we made our first investment in Australia’s build-to-rent housing market through our interest in Local, further expanding our exposure to housing-related investment opportunities. Local currently has over 2,154 build-to-rent apartments under management including close to 400 apartments that are leased as social and affordable housing.

We also developed a new strategy focused on residential development financing in Australia. The separately managed account will invest alongside the manager’s loan fund series, including in build-to-sell residential development loans. These short-duration loans finance the construction phase of residential projects, helping to bring additional housing supply to market at a time of ongoing housing shortages.

Investing in Australia’s future infrastructure

The Future Fund now has over $17bn in exposure to Australian domestic infrastructure, spanning a range of sectors including airports, ports, digital and communications infrastructure, energy and timberland.

This includes significant direct investments in Australian airports (Melbourne and Perth), and companies like Transgrid and CDC, which are playing a critical role in strengthening our electricity transmission network, and deepening Australia’s data and digital infrastructure, respectively.

During the year, we continued to support CDC’s growth ambitions through additional equity investment to help execute its business plan. As a result, CDC increased its contracted capacity to more than 1GW, with most of the new capacity expected to become operational in FY28 and FY29.

At the same time, we are broadening our investment in innovative Australian businesses, helping to build the next generation of strategically important industries and infrastructure. This year, we co-invested alongside Blackbird Ventures in Queensland-based Gilmour Space Technologies, gaining exposure to an Australian aerospace company that is developing capabilities across launch vehicles, satellites, advanced manufacturing, and spaceport operations.

In 2024–25, the Board of Guardians formalised this commitment through a new Responsible Investment Belief and Responsible Investment Policy, establishing a clear framework for how ESG considerations, including climate change, support long-term returns and protect our reputation.

Throughout 2025–26, our focus shifted from strategy development to implementation as we progressed the multi-year plan that will guide the continued evolution of our investment governance, processes and capabilities through to 2027.

A significant milestone this year was the Future Fund becoming a signatory to the Principles for Responsible Investment (PRI), the world’s leading global network of investors committed to understanding how ESG issues affect long-term investment outcomes.

Supported by the United Nations, the PRI brings together more than 5,000 organisations globally that collectively manage or advise on assets worth more than US$120 trillion. By becoming a signatory, we have publicly committed to six internationally recognised principles and have joined a global network dedicated to advancing responsible investment practices.

For the Future Fund, PRI membership provides access to industry-leading guidance, training opportunities and collaboration with peers facing similar long-term investment challenges. It also supports our broader efforts to strengthen responsible investment transparency and prepare for mandatory climate-related financial disclosures.

“It provides a globally recognised framework to test and strengthen how we integrate ESG and climate considerations across the portfolio, while helping us demonstrate – clearly and transparently – how this work supports long-term returns and portfolio resilience,” said Kirsten Simpson, Executive Director, Responsible Investment.

This year also saw continued progress in integrating the Board’s Responsible Investment Belief across the investment portfolio. The Responsible Investment Policy provides the framework for implementing the Board’s approach and reinforces four key pillars of activity:

• Integration
• Stewardship
• Exclusions
• Collaboration.

These pillars are supported by a set of management principles that guide how ESG and climate change considerations are incorporated into investment governance, portfolio design, manager selection, investment decisions and risk management processes.

The Policy also identifies three responsible investment priorities that are progressively being integrated into our investment research, stewardship activities and industry collaboration efforts: climate change, responsible technology, and nature and biodiversity.

As part of this work, the Responsible Investment Team continued to develop the governance frameworks, investment processes and manager oversight practices needed to embed responsible investment considerations more consistently across the investment lifecycle. This included further strengthening the assessment of ESG risks and opportunities in investment manager due diligence and ongoing portfolio monitoring activities.

“Our responsible investment approach is grounded in the belief that understanding ESG and climate-related risks and opportunities is fundamental to building and maintaining a resilient portfolio capable of delivering long-term value,” Kirsten said.

“As the investment environment continues to evolve, we are focused on ensuring our governance, processes and stewardship activities evolve alongside it.”

The progress made during 2025–26 represents another important step in the Future Fund’s responsible investment journey.

By strengthening our governance foundations, embedding responsible investment considerations more deeply into investment decision-making and collaborating with global peers, we are continuing to build a resilient, future-ready portfolio.

Over the past year, our Thought Leadership program has culminated in the release of two major position papers, released under the banner of Portfolio Resilience. Together, they examine how long-term investors can respond to a rapidly changing investment environment characterised by geopolitical uncertainty, inflation volatility, technological disruption, and structural economic change.

Released in November 2025, Portfolio Resilience: Part One, set out how we’re evolving our investment approach in response to these changes.

Arguing that investors should be cautious about relying too heavily on any single view of the future, the paper outlines an approach that considers a range of short, medium and long-term scenarios, recognising that economic and market outcomes can unfold in many ways.

Using inflation as a case study, the paper shows how we’ve adjusted the portfolio in response to growing risks identified in 2021, demonstrating how assessing vulnerabilities across the entire portfolio can strengthen resilience when conditions change unexpectedly.

More broadly, the paper outlines how we’re seeking to build a portfolio that can meet long-term objectives across a range of possible futures, rather than relying on a specific economic forecast proving to be correct.

The second paper, Portfolio Resilience: AI, was released in August 2026 and explored the investment implications of artificial intelligence, with a focus on how the Future Fund has built exposure across the AI value chain, from semiconductor manufacturers and digital infrastructure providers to software platforms and applications.

Rather than viewing AI as simply a technology trend, the paper considers it one of the defining investment thematics of our lifetime: a transformational force reshaping productivity, economic growth, inflation, labour markets and geopolitics.

As adoption accelerates, AI presents significant opportunities for investors. But the challenges surrounding AI extend beyond gaining exposure to AI; it is about building portfolio resilience in an environment characterised by rapid technological change, associated risks and uncertainty.

Given the pace of technological change and the difficulty of identifying long-term winners, our objective is not to predict which companies or technologies will ultimately prevail, but to build resilient exposure to this investment thematic that will benefit across a range of futures scenarios.

Reflecting on the series, Craig Thorburn, Director – Thought Leadership, said the papers consolidate the Future Fund’s thinking on how long-term investors can respond to a changing environment.

“The Portfolio Resilience position papers bring together how we think about managing identified portfolio vulnerabilities and capturing opportunity in a more complex environment.”

“By setting out our approach in detail, from inflation through to mega-themes like AI, we’re able to test and refine our thinking through engagement with peers and broader industry discussion.”

The Portfolio Resilience series builds on the Future Fund’s earlier contributions to industry debate, including A New Investment Order (2021), The Death of Traditional Portfolio Construction? (2022), and Geopolitics: The Bedrock of the New Investment Order (2024). Collectively, they reflect the view that many of the assumptions underpinning investment returns over the past 30 to 40 years can no longer be relied upon, requiring investors to rethink how portfolios are constructed and managed.

Established in August 2015, the MRFF has grown into a $26.3 billion long-term investment, with earnings used to fund research aligned to national health priorities. Over this period, the MRFF has supported transformative breakthroughs across the health system, with almost $5.0 billion in grants awarded to support life-changing medical research.

While we are responsible for investing funds to ensure the MRFF achieves strong and sustainable financial returns, we do not determine how those funds are allocated, with decisions on grant distribution and research priorities made by the Australian Government.

One of the most promising developments is the Total Artificial Heart, which uses magnetic levitation technology to improve the durability of the device, allowing patients to maintain an active lifestyle and improve their quality of life, offering new hope to Australians living with heart failure.

MRFF funding has also accelerated groundbreaking national research into childhood brain cancers, establishing a national childhood brain cancer clinical trial consortium and allocating fund to early-stage clinical research and the development of new treatments.

In addition to this, the MRFF has supported cutting-edge research in ocular genomics and gene therapy, advancing diagnosis and treatment for inherited eye diseases, alongside ongoing work in stem cell therapies and macular degeneration.

These medical breakthroughs reflect the MRFF’s role in strengthening Australia’s health system, from the lab bench to the bedside.

Under its 10-year Investment Plan, the MRFF continues to support several other high-impact initiatives, including the Indigenous Health Research Fund, the Clinical Trials Activity Initiative, the Dementia, Ageing and Aged Care Mission, the Emerging Priorities and Consumer-Driven Research Initiative, and the Frontier Health and Medical Research Initiative. Collectively, these programs address critical health challenges and drive innovation within the healthcare sector.

As we look ahead, this model of preserving capital while investing earnings ensures the MRFF will continue to back innovative research and deliver for generations to come.

The investment reflects a broader global shift as governments place greater emphasis on capabilities that support national security, economic resilience and public wellbeing. Defence technology, secure supply chains and advanced healthcare are increasingly important in this environment.

Arlington, based in Washington DC, invests in mid-market companies operating in regulated industries aligned with these priorities, including aerospace and defence, government services and technology, and healthcare.

Through this investment, we have gained exposure to businesses that support critical capabilities relevant to Australia and its strategic partners. Arlington’s portfolio includes companies that have operations in Australia including Keel (a submarine module builder), Systems Planning & Analysis (a program manager for AUKUS), and Eptec (Australian specialist engineering and asset preservation company), contributing to both Australian projects and our local economy.

Arlington’s strategy and sector expertise position it to identify opportunities arising from long-term structural and policy trends. This commitment demonstrates how we continue to access global investment opportunities linked to areas of increasing strategic importance.

These connections help strengthen our investment capability and support informed decision-making in an increasingly complex environment.

Throughout the year, we continued to build and contribute to our global network through major forums, bilateral engagements and industry collaborations. During the Australian Government Investment Mission to Indonesia, we worked alongside policy-makers, investors and institutions to strengthen relationships and share expertise, including engagement with Indonesia’s sovereign wealth fund, Danantara, on governance and operational practices.

We also maintained a strong presence in key international networks and forums. Participation in the OECD-Asia SOE Network, the International Forum of Sovereign Wealth Funds, the Investor Leadership Network (ILN), and the International Centre for Pension Management Forum provided opportunities to exchange views on governance, capital deployment, organisational capability and the evolving role of sovereign investors.

As part of our engagement with the ILN, we hosted CEO Amy Hepburn in Melbourne for discussions with leaders from banking, finance, government, asset management and superannuation. Discussions explored long-term challenges facing institutional investors, including climate risk, infrastructure, AI and talent intelligence, and shared practical insights on navigating risk and building capability in a rapidly changing environment.

We also contributed to discussions shaping the future investment landscape through participation in leading international conferences. At the Milken Institute Global Conference, Dr Raphael Arndt, CEO, and Shikha Gupta, Executive Director – Alternatives, joined discussions on market resilience, structural change and the evolving role of institutional capital. At COP30, Kirsten Simpson, Executive Director – Responsible Investment, engaged with global stakeholders on responsible investment and the role of capital in supporting the transition to a lower-carbon economy. Domestically, Greg Combet, Future Fund Chair, engaged with Australian Council of Superannuation Investors, reinforcing our contribution to governance and stewardship discussions within Australia.

This helps drive returns and risk management, and ensures Australia’s voice is represented in conversations influencing the future of global capital.

Held across Melbourne and Sydney and accessible virtually, the sessions provide an inclusive forum for staff to engage with colleagues, industry leaders and external partners.

By creating space for knowledge-sharing and open discussion, the program supports continuous learning and helps build a shared understanding of the issues shaping the organisation, the investment industry and the broader operating environment.

This year’s program reflected both the breadth of our work and the strength of our network.

Investment-focused sessions featured insights from partners including Citadel and Man Group, with discussions spanning market dynamics, risk management, leadership, culture and innovation. These sessions provided direct access to global perspectives and practical expertise, reinforcing the value of our long-standing partnerships.

Technology and innovation were also key themes. Sessions on AI explored its rapid evolution and emerging applications, including the rise of agentic AI and its potential implications across industries.

Alongside these topics, the program fostered deeper conversations about culture and inclusion. Sessions on neurodiversity and National Reconciliation Week encouraged discussion on strengthening decision-making, and the role investors play in supporting First Nations communities and managing social risks.

More than a series of presentations, the Lunch and Learn Program reflects our commitment to creating an environment where people can continuously develop, share ideas and learn from a diverse range of voices.

By connecting staff with leading thinkers, industry experts and one another, the program continues to strengthen capability, curiosity and collaboration across the organisation.

This marks a significant shift from experimentation to a coordinated approach focused on delivering measurable value while managing risk appropriately.

While AI supports our work in practical ways, such as helping our people find information faster, analyse data more efficiently and spend more time on higher-value activities, it is a tool that enhances productivity, rather than replacing human decisionmaking and judgement. Platforms such as LUMi, our in-house AI platform, Copilot and other AI-enabled tools have demonstrated the potential of AI when applied thoughtfully and responsibly.

Building on these early successes in the Knowledge Management Program, the AI Program provides a clear framework for scaling AI adoption across the Agency in a structured and responsible way. It brings together existing initiatives, strengthens governance and capability, and shifts our focus from exploration to delivery.

“At a high level, we’re designing a coordinated yet agile approach to apply AI-driven knowledge, collective intelligence and automation to support our people to improve investment outcomes, while remaining aligned with our values, responsibilities and government guidance,” said Gordon McKellar, Chief Operating Officer and Chief AI Officer.

The program is centred on four strategic priorities:

• Enhance investment outcomes
• Instil trust
• Empower our people
• Advance our capabilities.

To support delivery, we established dedicated leadership roles across each priority area to guide the adoption, governance and scaling of AI across the Agency. This creates clearer accountability and helps teams apply AI consistently and effectively in their day-to-day work.

For our people, the program provides practical direction on how AI can improve decision-making, reduce manual effort and surface insights more efficiently.

As AI becomes increasingly embedded in our ways of working, we are encouraging a mindset of curiosity and continuous improvement – identifying where approved tools can have the greatest impact and rethinking how work is done.

Through ongoing experimentation, learning and practical application, we will continue to build capability, strengthen confidence and unlock greater value over time.

AI has significant potential to enhance how we operate and invest. By applying it responsibly and focusing on areas where it can make the greatest difference, we are strengthening investment outcomes and supporting better decision-making across the Agency.

Over four weeks, 16 high-performing students from leading Australian universities joined us, bringing diverse perspectives from disciplines including finance, economics, law, data science and technology.

Interns were embedded across teams spanning Private Equity, Credit, Responsible Investment, Economics and Capital Markets, Dynamic Asset Allocation, Finance, Risk, Corporate Affairs, Project Services and Technology, gaining first-hand insight into how the Future Fund delivers on our purpose through meaningful work and day-to-day collaboration.

The program is as much about our people as it is about our interns. By pairing students with experienced colleagues, it creates opportunities for mentoring and leadership development, while encouraging fresh thinking across teams.

Interns brought curiosity, energy and enthusiasm, while teams shared deep expertise and experience.

A structured program of learning complemented this experience, including a Future Fund Academy workshop on presentation skills and a panel discussion on global economic trends. The interns also participated in an “Ask Me Anything” session with Greg Combet, Future Fund Chair, who shared insights on leadership, career pathways and the role the Future Fund plays in delivering on our purpose.

Reflecting on her experience with the Corporate Affairs Team, intern Aaliya Naqvi said, “What stood out most during the program was how generous people were with their time and expertise. Whether within my team or across the Agency, everyone was willing to share their knowledge and experiences, helping me better understand how different functions work together to deliver on the Future Fund’s purpose.”

The program also featured a new addition: the Future of Technology stream. John Campanaro, Talent Acquisition Lead, said the stream reflects the Agency’s preparedness for the future, “The Future of Technology stream reflects the growing importance of emerging technologies in the way we think about long-term investing.

The stream provides students with exposure to some of the trends reshaping global markets while contributing to meaningful work across the Fund. It embodies our Futureminded approach, offering early-career talent the opportunity to learn, innovate and help shape the future alongside us.”

The program concluded with final presentations, where interns showcased their projects, reflected on their experiences and shared key insights with colleagues and Agency leaders.

The cohort left with practical experience, expanded professional networks and a deeper understanding of how their skills can contribute to a purpose-driven organisation.

The impact of the program extends beyond the four-week experience. This year, we were pleased to make offers of employment to two former 2025 winter interns, Ryan Huynh and Leigh Murray, for ongoing analyst roles, highlighting the importance of the program in strengthening our future talent pipeline while reinforcing the value of continuous learning and investing in the next generation of professionals.

Secondees work alongside Aboriginal and Torres Strait Islander organisations, sharing their professional skills while gaining valuable insights into culture, community and leadership.

Tracey Williams, Head of Employee Experience completed a Jawun secondment in Western Australia, working with organisations across the Noongar Nation. Over several weeks, she gained firsthand insight into resilience and the power of collaboration, deepening her understanding of Aboriginal governance, community priorities and the role of partnerships in supporting long-term outcomes.

Her placement included engagement with organisations involved in Australia’s largest native title settlement, spanning approximately 200,000 square kilometres from Jurien Bay in the north to Margaret River in the south. Through this experience, she observed governance structures that balance traditional cultural authority with contemporary corporate and community leadership models.

A particularly significant aspect of the secondment was visiting a former mission site that was once home to hundreds of children during the Stolen Generations.

Reflecting on the experience, Tracey said, “Visiting the site was a moving experience. Today, it is being restored through a community-led process of remembrance, reconciliation and renewal, offering a powerful symbol of healing and hope.”

She also spoke of the impact of hearing stories of resilience and recovery from community members, reinforcing the importance of reconciliation as an ongoing commitment.

Alongside the cultural learning, Tracey contributed to several organisational projects, including a major operating model review for the South West Aboriginal Land and Sea Council and human resources initiatives for Aboriginal health organisation Moorditj Koort, supporting leadership recruitment and organisational change activities.

Our participation in Jawun forms part of the Agency’s Indigenous Strategy and supports the objective of promoting and celebrating Aboriginal and Torres Strait Islander history, heritage and culture.

Jen Dearn, Director – Sustainability Communications and Indigenous Strategy Project Lead, said, “Experiences like Jawun reinforce the importance of cultural competence and adaptability. They are a powerful way to strengthen our reconciliation journey by building cultural understanding and mutual respect.”