Future Fund's seismic stock picking revamp to hit active funds

Jonathan ShapiroSenior reporter

Updated May 6, 2017 – 12.42pm, first published at May 5, 2017 – 11.00pm

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Australia's biggest investor, the $148 billion Future Fund, has revealed for the first time the reasons behind its decision to cut active stock pickers in favour of low cost algorithms and passive funds.

Raphael Arndt, the chief investment officer of the Melbourne-based sovereign, told AFR Weekend on Friday that "large cap" Australian equity funds face the biggest threat to their business models as institutions change the way they invest in listed equities.

Jonathan Shapiro writes about banking and finance, specialising in hedge funds, corporate debt, private equity and investment banking. He is based in Sydney.