Australia’s sovereign wealth fund the Future Fund's allocation with Man Group Plc – the world's largest listed hedge fund – shrink by approximately AUD1.5bn ($1bn) in the first half of 2024, according to a report by Bloomberg.

The report cites the latest disclosures on the fund’s external managers as highlighting that despite the decline, Man Group remains the largest external manager in the Future Fund’s AUD225bn ($144bn) portfolio of unlisted assets. At the end of June, the firm managed AUD6.46bn in hedge fund investments, down from AUD7.93bn at the end of 2023, as revealed in filings recently uploaded to the fund’s website.

Neither the Future Fund nor Man Group provided comments on the reduced mandate.

Future Fund Chief Executive Officer Raphael Arndt recently disclosed that the fund made AUD50bn worth of changes to its overall portfolio in the past year. While specific investments were not named, Arndt emphasised that the adjustments were aimed at strengthening the fund’s resilience in the face of rising interest rates and escalating geopolitical risks.

Hedge fund investments, which make up around 15% of the Future Fund’s overall assets, have delivered strong returns, according to Arndt.

Another notable shift in the Future Fund’s hedge fund allocations over the first half of 2024 was a significant increase in its mandate with Boston-based Wellington Management. The firm’s allocation surged by about AUD1.2 billion to reach AUD3bn, reflecting the dynamic changes within the fund’s investment strategy.