Future Generation founder Geoff Wilson has warned difficult markets will curb immediate ambitions for the philanthropic fund of funds to grow further, as former NSW premier Mike Baird was named as the new Future Generation Australia chairman.
“It’s about capital preservation in difficult markets and in strong buoyant markets there are opportunities to grow,” Mr Wilson said.
“There’s no reason it couldn’t grow to $2 billion in the next 10 years with Mike at the helm.”
Under the model, for every $1 billion managed by Future Gen, about $10 million is given to not-for-profits each year because fund managers including Paradice, Eley Griffiths, Regal, Sandon and Bennelong, forgo their management fees. Future Generation Australia supports children and youth at risk, while Future Generation Global supports youth mental health.
Both entities are run by Caroline Gurney, who said need for the services had increased during COVID. The fund is in the final stages of considering which charities to support this year after taking expressions of interest in February, and is moving to prevention, rather than support, for youth mental health.
Mr Baird, who runs aged care group HammondCare, said he wanted to grow philanthropic gifts from the corporate sector, and ensure that people were passionate about the cause they were supporting. He said ESG could, in some instances, distance people from community need.
“I think the risk is it becomes tokenistic, ritualistic and head-based, rather than genuinely heart-based,” said Mr Baird.
“Everyone thinks we’ve got to do good things, but if you’re passionate, you’ll do much more.”
“There shouldn’t be a disconnect between corporate Australia, the finance sector, and the real need in the community,” Mr Baird said.
“This [Future Generation] is a bridge. It provides a very clear opportunity for those in the finance sector to make a difference to young kids… There’s great goodwill but often you need to provide the mechanisms.”
Mr Baird will stand down as chair of the Australian Business Growth Fund to make time for this pro-bono role, alongside sitting on the Cricket Australia and Surfing Australia boards.
As well as increasing awareness for community need, Mr Wilson said in time, the Future Generation group could grow funds under management and its donations by fund performance, capital raisings, and perhaps, expanding into other property and fixed interest sectors are a logical expansion for the group.
But he warned markets could be in for a longer-than-usual bear market after 20 years of falling interest rates and accompanying high asset prices. He said an average bear market was about 18 months, but this one could last longer because of the long bull market.
“It could be a very tough period,” he said, noting that the two entities had grown 600 per cent in the past eight years by raising capital as well as performance.
In response to a question about what the Liberal party should do following its election defeat on the weekend, Mr Baird said a period of reflection was necessary.
“I think there are lessons. My encouragement would be to observe, and dwell before you respond. I certainly think there is a good period of reflection to be had,” he said. “There are many things to go through, and it’s much more complicated than you need to go left or right.”
He also discounted a political comeback in the near future. “It’s certainly not in any consideration at all,” he said, adding that US president Joe Biden became president at 78. “So there’s a long way to go.”
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