25 January 2022
EstherV
Right to Know
xxxxxxxxxxxxxxxxxxxxxxxxx@xxxxxxxxxxx.xxx.xx BY EMAIL
Dear Sir/Madam
Your Freedom of Information Request
I refer to your request received by the Future Fund Management Agency (“
Agency”) by email
on 26 December 2021, requesting access under the Freedom of Information Act 1982 (“
FOI
Act”) to documents as fol ows (the “
Request”):
Please provide documents proving the value amount (in Aud or Usd), current location,
and current jurisdiction of the assets managed by FutureFund which are stated to be
belonging to We the People. Names of the persons, or entities control ing this fund to
be included.
Authorised decision-maker
I am authorised by the principal officer of the Agency under section 23(1) of the FOI Act to
make a decision on requests for access to documents. My name and designation are set out
below. This letter sets out my decision in relation to your Request for access to information,
the reasons for that decision and your review rights in relation to the decision.
My decision in relation to your FOI application
My decision and the reasons for my decision in relation to your Request are set out in the
attached Statement of Reasons.
Review rights
If you are dissatisfied with my decision, you may apply for internal review or to the Information
Commissioner for review of the decision.
Internal review
Under section 54 of the FOI Act, you may apply in writing to the Agency for internal review of
my decision. The internal review application must be made within 30 days of the date of this
letter to:
email:
xxx@xxxxxxxxxx.xxx.xx
post:
Future Fund Management Agency
Locked Bag 20010
Melbourne VIC 3001
Level 14/447 Collins Street, Melbourne VIC 3000 Locked Bag 20010, Melbourne Vic 3001
Telephone: +61 3 8656 6400
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www.futurefund.gov.au
Where possible, please attach reasons why you believe review of the decision is necessary.
The internal review wil be carried out by another officer within 30 days.
Information Commissioner (“IC”) review
Under section 54L of the FOI Act, you may apply to the Australian Information Commissioner
to review my decision. An application for IC review must be made in writing within 60 days
of the date of this letter, and be lodged in one of the fol owing ways:
online:
https://forms.business.gov.au/smartforms/servlet/SmartForm.html?formCode=ICR_10
email:
xxxxx@xxxx.xxx.xx
post:
Director of FOI Dispute Resolution,
GPO Box 5218, Sydney NSW 2001
fax:
02 9284 9666
Complaint rights
If you are unhappy with the way we have handled your FOI request, you can make a complaint
to us. If we do not respond or you are not satisfied with our response, you can lodge a
complaint with the IC in writing in one of the ways provided above.
More information about IC reviews and FOI complaints is available on the Office of the
Australian Information Commissioner (OAIC) website
at https://www.oaic.gov.au/freedom- of-
information/reviews-and-complaints/. Yours sincerely
Christina Erlenmaier
FOI Decision Maker
Encl.
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STATEMENT OF REASONS
EVIDENCE ON WHICH MY FINDINGS AND DECISION ARE BASED
In considering your Request, I relied on the fol owing information and documentary evidence:
•
your Request;
•
FOI Act;
•
FOI Guidelines issued by the Australian Information Commissioner under s 93A of the
Freedom of Information Act 1982;
•
advice from investment areas within the Agency; and
•
previous consultation with certain of our external investment managers (“
Managers”).
BACKGROUND
The Future Fund Board of Guardians (“
Board”) manages six investment funds (“
Funds”)
which were established by enabling legislation and have specific purposes as set out in that
legislation. The investments of the Funds are held by the Board for and on behalf of the
Commonwealth of Australia. The Future Fund is the primary fund in terms of being significantly
larger than the other Funds and its object is to strengthen the financial position of the
Commonwealth by making provision for unfunded Commonwealth superannuation liabilities.
The Board is responsible for deciding how to invest the assets of the Funds and invests the
assets of the Funds through Managers, as required by legislation. Operating independently of
Government, the Board, supported by the Agency, manages the Funds to deliver risk-adjusted
returns over the long term in accordance with the relevant Investment Mandate Directions for
each of the Funds from Government.
The Board has a unique investment model and has developed a comprehensive investment
program using a wide variety of strategies in order to operate effectively in increasingly
competitive international financial markets. The Agency is responsible for the development of
recommendations to the Board on the most appropriate investment strategy for the Funds and
for the implementation of the strategy. The Board and the Agency concentrate on determining
the most efficient allocation of risk across investment markets to generate desired returns.
Information in the public domain
The Board and Agency are, first and foremost, accountable to the Commonwealth Government
for their activities. The Board and Agency already disclose publicly a range of detailed
information relating to their investment activities. These include:
•
details of the statutory basis on which the Board and Agency operate
(https://www.futurefund.gov.au/about-us/legislation-and-governance)
•
the publication of a Statement of Investment Policies, which is available on our
website
(https://www.futurefund.gov.au/investment/how-we-invest/investment-
policies), which provides investment information for each investment fund including
appropriate details on the investment strategy and investment approach;
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•
the requirement to produce and table an annual report and audited financial statements
in Parliament, which is also available online
(https://www.futurefund.gov.au/about-
us/annual-reports), and includes details of the Board’s investment strategy and
approach to governance, risk management and use of external investment managers.
The annual report also includes some tables on asset class exposures, and aggregate
physical investments by geographic region.
•
quarterly portfolio updates
(https://www.futurefund.gov.au/news-room), which
provide reports on performance and positioning of the investment portfolio as wel as
commentary on the investment environment and investment activities;
•
annual year in review;
•
public speeches delivered by senior representatives of the organisation, which include
speeches on topics such as our investment strategy and process, and investment in
specific asset classes; and
•
position papers on topical investment issues.
In addition, where appropriate, and where it does not expose the Board, Agency or Funds to
an unacceptable level of risk, the Board and Agency may voluntarily publish other information
about their activities and how they invest for the benefit of the public.
DECISION
I have decided to refuse access to the documents requested in your Request on the basis that
the information is exempt pursuant to sections 45, 47, 47E and 47G of the FOI Act. I refer to
the documents requested in your Request as the “Exempt Documents” in my decision.
Set out in Appendix 1 are relevant extracts of sections 45, 47, 47E and 47G of the FOI Act.
REASONS FOR MY DECISION
I note that no one document currently exists outlining all holdings of the Fund. However, even
if such document (or documents) did exist or we were otherwise obliged to generate such a
document under the FOI Act, my decision would remain to exempt such a document or
documents pursuant to each of sections 45, 47, 47E and 47G of the FOI Act.
Section 47 – commercially valuable information/ trade secrets
Section 47(1)(a) of the FOI Act exempts a document if disclosure would disclose trade secrets.
I find that disclosure of the Exempt Documents would involve disclosure of trade secrets. A
trade secret is information possessed by one trader that is not generally known which gives
the trader an advantage over its competitors. For the reasons that fol ow, I find the Exempt
Documents contain trade secrets.
Section 47(1)(b) of the FOI Act exempts a document if disclosure would disclose information
having a commercial value that would be, or could reasonably be expected to be, destroyed
or diminished if the information was disclosed. Information has a commercial value if it is
valuable for the purposes of carrying on a commercial activity, for example if it is essential to
the profitability of a business operation or if a genuine buyer is prepared to pay to obtain that
information. For the reasons that fol ow, I find the Exempt Documents contain information
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having a commercial value that, if disclosed, could reasonably be expected to be destroyed or
diminished.
•
Col ectively, the Funds’ portfolios are actively managed, and the Board and Agency
devote a significant amount of time and resources to the management and strategy
related to both the specific asset classes the Funds are invested in, and the entire
portfolio. The disclosure of the Exempt Documents would, or could reasonably be
expected to, adversely affect the value of such unique and proprietary information and
put the Funds and Managers at a competitive disadvantage.
•
Details of the portfolio of investments that the Funds invest in are integral to the
investment performance of the Funds. Given the nature of investment markets globally
and the various investment types, it may be possible to derive commercial y valuable
information in respect of particular sectors, strategies and themes if the Exempt
Documents were made publicly available under the FOI Act. This could reasonably be
expected to diminish the value of the Funds and put the Board and its Managers at a
competitive disadvantage, particularly when transacting in the marketplace.
•
The information sought, as a whole, is valuable to competitors in the market as the
release of a document containing the entire list of the Funds’ holdings at particular
points in time may enable derivation of, or at least informed speculation on, the Board’s,
Agency’s and Managers’ strategies and expectations of the performance of those
investments and markets.
•
The names of particular funds that the Funds have invested in and their value at any
point in time, may enable derivation of, or at least informed speculation on, the value
of single investments and the value of the Manager itself.
•
Many investment opportunities are not offered to the general public and are only
offered to selected qualified institutions. The Board and Agency do not publish the
names of the specific funds that the Funds invest in or specific fund financial
information, and the information sought is not currently publicly available or general y
known. Although the names of the Managers are published, it is not presently obvious
or known to the market which particular funds the Funds invest in, or what their
allocations are with particular funds. Managers have indicated to the Agency that
information about their investor base is proprietary information in a highly competitive
global industry, and Managers are generally very careful to maintain the confidentiality
of the investor mix in their funds.
•
In the case of oversubscribed or capacity-constrained funds in particular, Managers
often reduce the allocation to some investors to allow for commitments by other
investors. In cases where the Board has received an allocation in such a fund which is
larger than the Manager’s other clients, it may have negative consequences for the
relationship between the Manager and its other clients. Particular Managers have
indicated that disclosure of this information could reduce the size of allocations offered
to the Board in future. In some cases, the Manager may exclude certain investors from
a particular fund whilst wishing to maintain a relationship with such investor with
respect to future funds. Additionally, some Managers have indicated that the disclosure
of the identity of the investors with whom they offer capacity could reveal an important
element of their strategy which may harm the relevant Manager and the Funds by
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impacting on future opportunities. Such disclosure could also harm relationships
between the relevant Manager and their other investors who were not offered the same
opportunity to participate or have been allocated different amounts.
I am satisfied that the documents the subject of your Request are exempt under sections
47(1)(a) and 47(1)(b) of the FOI Act.
Section 45 – breach of confidence
Section 45(1) exempts a document if its disclosure would found an action by a person for
breach of confidence.
To found an action for breach of confidence a person must be able to:
i)
specifically identify the information in question;
i )
show that the information has the necessary quality of confidentiality (and is not, for
example, common or public knowledge);
i i)
show that the information was communicated in a mutual understanding that the
receiver was to keep the information confidential; and
iv)
show that there is actual or threatened misuse of that information.
For the reasons that fol ow, I find that disclosure of the Exempt Documents would found an
action by a person for breach of confidence.
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•
The information can be identified with specificity, being the information contained in
the Exempt Documents.
•
The information is confidential in nature. It is known to a limited number of people
comprising the Board, Agency and relevant Managers (in the case of each fund) and
their and our relevant professional advisers and service providers. Even then, the
entirety of the relevant Exempt Documents sought in each part of the Request would
not be known by any single Manager, professional adviser or service provider. As is
standard practice for institutional investment both in Australia and offshore, investment
transaction contracts pursuant to which investments in funds are made by the Board
include a contractual obligation of confidentiality and such disclosure would be
inconsistent with those obligations. Even in the absence of such contractual obligations,
a duty of confidentiality would also be owed under the general law in respect of the
information.
•
I find the information was communicated within the context of a mutual understanding
between the Board and Agency and the various Managers, professional advisers and
service providers. At the time of communication of the information, it was accepted
that the Board and Agency would treat the information as confidential. I find that the
information would not have been provided without that understanding. Many
Managers, who manage funds in which the Funds have holdings, have expressed
serious concerns in the past about the disclosure of investment information to outside
parties.
•
I find that disclosure under FOI would be inconsistent with the understanding that the
information would be kept confidential. Outside parties would not be subject to the
strict obligations of confidentiality under the relevant fund documents, and may have
motives which are not aligned with the interests of the relevant funds and Managers.
I am satisfied that if the information were disclosed, the various Managers, and
potentially their professional and service providers, would suffer detriment.
Accordingly, I am satisfied the documents requested in your Request are exempt under section
45.
Section 47G(1 )(a) – unreasonable disclosure of business, commercial or financial
affairs
Section 47G(1)(b) – prejudice future supply of information
For the reasons given above, I find that the Exempt Documents concern the business,
commercial or financial affairs of organisations which, if disclosed, would or could reasonably
be expected to unreasonably affect those organisations adversely in respect of their lawful
business, commercial or financial affairs. I also find disclosure of the information could
reasonably be expected to prejudice the future supply of business and commercial information
to the Agency and the Board.
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Some of these Managers have indicated that if their commercial and business information is
disclosed, they would reduce or refuse to give the Board access to investment-related
information needed for the proper monitoring and management of the Funds’ existing
investments. Managers also have indicated that, if the Board and Agency are not able to
protect their confidential business and commercial information that they would deny the Funds
access to new investments.
Accordingly, I find the documents the subject of your Request are conditionally exempt under
sections 47G(1)(a) and (b) if they are not already exempt under sections 45 and 47 (as
applicable). I discuss the public interest below.
Section 47E(d) – substantial adverse effect on Agency operations
For the above reasons, I also find disclosure of the Exempt Documents could reasonably be
expected to have a substantial adverse effect on the proper and efficient conduct of the
operations of the Agency and the Board.
The Agency and the Board seek to maximise investment returns within the constraints of
acceptable but not excessive risk. Their ability to do so effectively and efficiently is dependent
on the Agency and the Board being able to operate in competitive commercial markets.
Disclosure of the information would restrict the ability in the future to operate in competitive
commercial markets which would have a substantial adverse effect on the operations of the
Agency and the Board.
Accordingly, I find the documents in the subject of your Request are conditionally exempt
under section 47E(d). I discuss the public interest below.
Public interest test
Section 11A(5) of the FOI Act requires me to consider whether providing access to a
conditionally exempt document would, on balance, be contrary to the public interest. This
requirement only applies in relation to the application of the conditional exemptions to the
Exempt Documents under sections 47G and 47E.
I confirm that, in deciding whether access to the information would, on balance, be contrary
to the public interest, I did not take into account any of the irrelevant factors set out at section
11B(4) of the FOI Act.
Public interest factors which might favour disclosure
The FOI Act sets out four factors (in section 11B(3)) which would tend to favour access in the
public interest, which must be considered if relevant. I have considered whether giving access
to the Exempt Documents would:
i)
promote the objects of the FOI Act;
i )
inform debate on a matter of public importance;
i i)
promote effective oversight of public expenditure; or
iv)
allow a person access to his or her own personal information.
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There may be an argument (which I don’t agree with) that giving access to the Exempt
Documents could promote oversight of the management and efficiency of the investment of
the Funds. However, even if that argument were valid, I am of the view that any public
interest in disclosure would substantially be outweighed by the public interest factors against
disclosure.
Public interest factors which do not favour disclosure
I find that the fol owing public interest factors do not favour access to the Exempt Documents
being provided to you:
•
The public interest in maintaining confidential relationships with Managers. The giving
of access to the Exempt Documents would result in the breach of a general expectation,
and contractual obligations where applicable, that relevant Managers’ confidential
information shared with the Agency or the Board wil not be disclosed to others or used
for other purposes without their express written consent – which in previous
consultations with certain of our Managers they have advised they would not be wil ing
to provide because of the commercial sensitivity of the information.
•
The public interest in protecting confidential and commercially sensitive information of
third parties. Providing access to the Exempt Documents would disclose sensitive and
confidential information relating to the business, commercial or financial affairs of an
organisation such as a Manager which, if disclosed, would reasonably be expected to
adversely affect the interests of the organisation to which it relates. For example, it
would expose those organisations to the real risk that information relating to their
affairs could be disclosed to their competitors and other investors.
•
The public interest in the Funds being able to receive access to information essential to
its ability to operate efficiently and effectively. Giving access to the Exempt Documents
is very likely to discourage Managers and other businesses and organisations from
providing information, or information of a commercially sensitive nature, to the Agency
and Board in the future and, as a result, could reduce opportunities for investment or
divestment of public funds and adversely affect the Board and Agency’s ability to
effectively monitor, manage and trade its investments.
•
The public interest in the ability of Australia’s sovereign wealth fund to invest and
participate in a competitive international marketplace on a similar level to its
competitors.
•
The disclosure of the Exempt Documents could adversely affect the ability of the Funds
to achieve future returns. If the ability of the Agency and the Board to properly manage
its investment portfolio is diminished, there is a real risk of decreased investment
returns for the benefit of the Commonwealth of Australia. It is expected that disclosure
would result in diminished opportunities for the Board to engage high-calibre Managers
and competitively participate in domestic and global investment markets (including
secondary markets) in the future and, as a result, could reduce opportunities for
investment of public monies.
I am satisfied that any benefit to the public of disclosing the Exempt Documents is outweighed
by the benefit to the public of not disclosing the Exempt Documents and providing access
would, on balance, be contrary to the public interest.
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APPENDIX 1 – EXTRACTS OF SECTIONS 45, 47, 47E AND 47G OF THE FOI ACT
Section 45
(1) A document is an exempt document if its disclosure under this Act would found an
action, by a person (other than an agency or the Commonwealth), for breach of
confidence.
(2) Subsection (1) does not apply to a document to which subsection 47C(1) (deliberative
processes) applies (or would apply, but for subsection 47C(2) or (3)), that is prepared
by a Minister, a member of the staff of a Minister, or an officer or employee of an
agency, in the course of his or her duties, or by a prescribed authority or Norfolk Island
authority in the performance of its functions, for purposes relating to the affairs of an
agency or a Department of State unless the disclosure of the document would constitute
a breach of confidence owed to a person or body other than:
(a) a person in the capacity of Minister, member of the staff of a Minister or
officer of an agency; or
(b) an agency or the Commonwealth.
Section 47
(1) A document is an exempt document if its disclosure under this Act would disclose:
(a) trade secrets; or
(b) any other information having a commercial value that would be, or could
reasonably be expected to be, destroyed or diminished if the information were
disclosed.
(2) Subsection (1) does not have effect in relation to a request by a person for access to a
document:
(a) by reason only of the inclusion in the document of information concerning that
person in respect of his or her business or professional affairs; or
(b) by reason only of the inclusion in the document of information concerning the
business, commercial or financial affairs of an undertaking where the person
making the request is the proprietor of the undertaking or a person acting on
behalf of the proprietor; or
(c)
by reason only of the inclusion in the document of information concerning the
business, commercial or financial affairs of an organisation where the person
making the request is the organisation or a person acting on behalf of the
organisation.
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Section 47E
(1)
A document is conditionally exempt if its disclosure under this Act would, or could
reasonably be expected to, do any of the fol owing:
…
(d) have a substantial adverse effect on the proper and efficient conduct of the
operations of an agency.
Section 47G
(1) A document is conditionally exempt if its disclosure under this Act would disclose
information concerning a person in respect of his or her business or professional affairs
or concerning the business, commercial or financial affairs of an organisation or
undertaking, in a case in which the disclosure of the information:
(a) would, or could reasonably be expected to, unreasonably affect that person
adversely in respect of his or her lawful business or professional affairs or that
organisation or undertaking in respect of its lawful business, commercial or
financial affairs; or
(b) could reasonably be expected to prejudice the future supply of information to
the Commonwealth or an agency for the purpose of the administration of a law
of the Commonwealth or of a Territory or the administration of matters
administered by an agency.
(2) Subsection (1) does not apply to trade secrets or other information to which section 47
applies.
(3) Subsection (1) does not have effect in relation to a request by a person for access to a
document:
(a) by reason only of the inclusion in the document of information concerning that
person in respect of his or her business or professional affairs; or
(b) by reason only of the inclusion in the document of information concerning the
business, commercial or financial affairs of an undertaking where the person
making the request is the proprietor of the undertaking or a person acting on
behalf of the proprietor; or
(c)
by reason only of the inclusion in the document of information concerning the
business, commercial or financial affairs of an organisation where the person
making the request is the organisation or a person acting on behalf of the
organisation.
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Document Outline
