Source: Auckland Council
The Auckland Future Fund has formally launched as Auckland Council’s new council-controlled organisation and regional fund.
The fund, which is in place to enhance the region’s physical and financial resilience, was formalised by its new Board of Directors on Friday, September 27, through the signing of the trust deed and other founding documents.
“This is an exciting milestone for the Auckland Future Fund – we now have the fund entity in place and we can continue building the foundations that will contribute to it enhancing Auckland’s physical and financial resilience,” said board chair Christopher Swasbrook.
“This is a long-term initiative and it is early days, but as a board we are looking forward to shaping and influencing the fund which will not only help protect the Auckland region, but also provide long-term capital growth and cash distributions to help fund council services.”
Liaison councillor Christine Fletcher said the fund represents a new direction for Auckland Council that will stand the region in good stead, as an enduring asset for Auckland.
“The Auckland Future Fund has been a work in progress but it is pleasing to now see it now in place and able to work for all Aucklanders,” says Mrs Fletcher. “I am personally very excited about what the fund represents and its potential to provide not only certainty but also returns for our region.”
The future fund was confirmed in June through the council’s Long-term Plan 2024-2034. It is estimated to provide the council with around an additional $40 million of cash returns per year from 2025/26.
The fund will initially be capitalised with the council’s remaining Auckland International Airport Limited shares.
The Auckland Future Fund will operate under the high-level direction of the council, but through an independent structure.
The Board of Directors – chair Chris Swasbrook, Craig Stobo and David Callanan – were recently appointed to lead the fund, following a robust appointment process that received unanimous support from the Performance and Appointments Committee and the council’s independent advisory board Houkura.
Frequently asked questions
What is the Auckland Future Fund?
The Auckland Future Fund is an investment for current and future Aucklanders and is designed to enhance the Auckland region’s physical and financial resilience.
By diversifying Auckland Council’s major investments, the Auckland Future Fund is part of a financial strategy to better protect and strengthen Auckland in times of need.
How does the fund work?
The fund sees the council moving from one key investment to many, adding diversity by investing across different entities, sectors and locations.
The fund has also been established to deliver revenue to help fund services and reduce reliance on rates. It is estimated it will provide an additional $40 million per year to council, from 2025/2026.
The Auckland Future Fund was introduced as part of Auckland Council’s Long-term Plan 2024-2034. It launched in September 2024. The intent is for the fund to create long-term benefits for the Auckland region and protect the value of intergenerational financial investments.
How is the fund set-up?
As a council-controlled organisation, the Auckland Future Fund operates under the high-level direction of Auckland Council but through an independent structure, where the trustee’s board makes all key decisions.
The board are guided by a clear set of investment objectives and policies set by Auckland Council. Established as a trust, there are strict protections over the fund’s assets. In particular, the protections require the fund to maintain the real value of its capital over the long term. Further protection is also being sought via the introduction of a local bill.
How will the investments work?
The fund will initially be capitalised with the council’s remaining Auckland International Airport shares. The council is assuming average annual returns of 7.24% per annum from the fund over the long term, after management costs. Of the projected return, 5.24% will be returned to the council as an annual cash distribution, with the remainder retained to protect the real value of the fund over time. The council may decide to transfer other investments into the fund at a later date.
What’s the next step?
Now the Auckland Future Fund is established formally as a trust, the board’s next priority will be looking at how best to diversify the investment in Auckland International Airport to spread the financial risk and to meet its purposes of providing positive returns, and maintaining or growing the fund over the long term.
