Raphael Ardnt didn’t begin his career as an investor; but rather as an infrastructure
engineer right out of school in 1992. He came to
investing—in 2001—out of frustration, after an
infrastructure project on which he was working
lost funding. “I was drawn to investing because I
wanted to get closer to the money, I wanted to see
how those decisions were made,” he tells CIO.
After seven years in the investment industry,
he moved to Australia’s Future Fund in 2008 to
lead the infrastructure and timberland group.
The sovereign wealth fund had just launched in
2006 with a combination of surplus funding from
Australia’s government budget and profits from the
sale of the Australian telecom company Telstra.
“In many ways, when we started, the Future
Fund was the best-funded startup out there,” he
said. “We had $60.5 billion, no investments, and
no liabilities. It was an open road.”
The investment team wasn’t interested in
setting up another slow-moving bureaucracy.
Instead, it envisioned an investment process that
was dynamic and brought in viewpoints from a
variety of investment strategists on the team. “We
were really focused on culture from day one. We
didn’t want to run things in silos. We wanted to be
able to take everything to each part of the team,”
Ardnt recalls. “Our flattened structure lets us
move very fast. Everyone is involved.”
In practice, this structure means that the
Future Fund operates somewhat differently than
typical sovereign wealth funds that are organized
in teams with little interaction between groups.
In 2014, Ardnt took over as CIO of the fund
itself, a move he says was aided by the collaborative
culture within the fund.
“There’s no crash course to becoming a CIO;
you can’t go take a class,” he said, “There are too
many decisions, too many layers. The key for me is
that we had already spent time on culture, so you
trust that everyone is on the same page. You trust
them to go make the decisions. You’re involved,
certainly, but you’re on a team that has been
empowered to act. That’s big.”
Ramping up the Future Fund’s involvement
in the venture capital space is one area Ardnt has
innovated. Three years ago, the investment team
started to develop a co-investment program to
invest in the B through D rounds of startup financ-
ings. “The decision involved taking some risks,”
Ardnt says, noting that in early rounds, companies
are typically cash flow negative and still evolving
into mature businesses.
But so far, the risk has paid off. The Future
Fund has already realized a few exits from the
30 transactions it has co-invested in over the
past three years. Ardnt adds that by doing these
deals, the investment team has also gained critical
insight into new technologies and growing industries. The newfound understanding is informing
new investment decisions in an effort to future-proof the fund’s portfolio.
Ardnt says the biggest lesson the team has
learned is that creating a culture is more than just
deciding how things will work in the organization.
It’s about bringing everyone in and aligning a core
set of investment beliefs with the culture. From
there, even if investment ideas or structures change,
group leaders will still know what the goals are and
where the fund is headed. “It’s a really exciting time
to be the CIO and to be thinking about what’s next,”
he says. —Bailey McCann
Waleed Al Mokarrab
Abu Dhabi Investment
Australian Future Fund
Raphael Arndt, Chief Investment Officer (Melbourne, Australia)