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Australian Capital Territory

PRI reporting framework 2020

Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - HF 01]

Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]

Indirect – Manager Selection, Appointment and Monitoring

Listed Equity and Fixed Income Strategies [SAM 01] Selection [SAM 02 - 03] Appointment [SAM 04] Monitoring [SAM 05 - 07] Outputs and outcomes [SAM 08 - 09]

Direct - Listed Equity Active Ownership

Overview [LEA 01] (Proxy) voting and shareholder resolutions [LEA 12 - 21]

Confidence building measures

Confidence building measures [CM1 01 - 07]

Export Public Responses

You are in Organisational Overview » Basic information

Basic information

OO 01. Signatory category and services

01.1. Select the type that best describes your organisation or the services you provide.

Non-corporate pension or superannuation or retirement or provident fund or plan

Corporate pension or superannuation or retirement or provident fund or plan

Insurance company

Foundation

Endowment

Development finance institution

Reserve - sovereign or government controlled fund

Family office

Other, specify

01.3. Additional information. [Optional]

While the legal entity that is represented as a signatory to the Principles for Responsible Investment (PRI) is the Australian Capital Territory (Territory), the body politic established by section 7 of the Australian Capital Territory (Self-Government) Act 1988 (Cwlth), the commitments that derive from the ACT Government’s endorsement of the PRI apply to specific financial investment asset portfolios managed by the Treasury stream (Treasury) of the Chief Minister, Treasury and Economic Development Directorate (CMTEDD). Of important note, the financial investment operations are not performed by a separate legal entity to the body politic.

The range of responsibilities of CMTEDD is extensive and extends beyond just financial investment operations. CMTEDD leads the ACT Public Service (ACTPS) and provides strategic advice and support to the Directorate's Ministers and the Cabinet on policy, financial and economic matters, service delivery and whole of government issues. The Directorate facilitates the implementation of government priorities and drives many new initiatives.

The Directorate is responsible for: collecting and managing taxation revenue; managing the Government's financial investment assets and debt liabilities, including the defined benefit superannuation financial investment assets and liabilities; and providing advice to the Government and ACT agencies on the Territory's budget and financial management, economic and revenue policy, federal financial relations, and workers compensation policy. The Directorate is also responsible for Shared Services which provides financial, ICT and HR support across Government.

The Directorate focuses on facilitating business development, investment, tourism and events, sport and recreation, arts, and other government activity, often in coordination with the private sector, to increase the economic performance of the ACT. The Directorate is also responsible for land release and facilitating projects through the office of Coordinator-General, as well as Procurement and Capital Works. Additionally, the Directorate established the Office for LGBTIQ Affairs to coordinate and support strategic government projects and policy to promote Canberra as the most welcoming city in Australia for LGBTIQ people.

As an Australian Sovereign entity the ACT Government is responsible for delivering a broad range of services in relation to Health, Education, Community Services, Housing, Transport, Policing, Emergency Services, Sport and Tourism. It is within this context and the unique position of being an Australian Sovereign entity that the underlying investment activities are conducted with a specifically targeted approach, and in a manner that complies with legislative and government procedural requirements.

Asset Liability Management within the Treasury division of CMTEDD has responsibility for the financial investment operations of the Territory. For the purposes of this PRI Assessment Response, all references to the Territory entity responsible for the financial investment activities will be Treasury.

OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

Australia

02.2. Indicate the number of countries in which you have offices (including your headquarters).

2-5

6-10

>10

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

6 FTE

02.4. Additional information. [Optional]

Within Treasury there are 6 FTE's responsible for the management of ACT Government financial investment assets, debt liabilities (ACT Government bond issuance) and treasury operations, as well as all the relevant financial and statutory reporting, management reporting and budget development and reporting.

The estimated total of all CMTEDD staff is in excess of 2,400 (FTE's).

OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

Yes

03.3. Additional information. [Optional]

The Australian Capital Territory is the signatory to the PRI (in relation to the financial investment assets managed by Treasury). The ACT Government does not operate any commercial entities or subsidiaries that are also signatories to the PRI.

OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

30/06/2019

04.2. Indicate your total AUM at the end of your reporting year.

Include the AUM of subsidiaries, but exclude advisory/execution only assets, and exclude the assets of your PRI signatory subsidiaries that you have chosen not to report on in OO 03.2

Total AUM
Total AUM	trillions	billions	millions	thousands	hundreds
Currency
Assets in USD
Assets in USD	trillions	billions	millions	thousands	hundreds

Not applicable as we are in the fund-raising process

We are a sovereign wealth fund and choose to not report our AUM

04.5. Additional information. [Optional]

Total AUM represents the total net asset value of the financial investment assets managed by Treasury on behalf of the ACT Government and other Government-related stakeholders at the end of the financial reporting year, 30 June 2019.

There are no AUM exclusions or the possibility of AUM duplication.

OO 06. How would you like to disclose your asset class mix

06.1. Select how you would like to disclose your asset class mix.

as percentage breakdown

	Internally managed (%)	Externally managed (%)
Listed equity	0 0	>50% 53
Fixed income	0 0	10-50% 33.2
Private equity	0 0	<10% 3.4
Property	0 0	<10% 8.6
Infrastructure	0 0	<10% 0.1
Commodities	0 0	0 0
Hedge funds	0 0	0 0
Fund of hedge funds	0 0	0 0
Forestry	0 0	0 0
Farmland	0 0	0 0
Inclusive finance	0 0	0 0
Cash	0 0	<10% 0.7
Money market instruments	0 0	<10% 1
Other (1), specify	0 0	0 0
Other (2), specify	0 0	0 0

as broad ranges

06.2. Publish asset class mix as per attached image [Optional].

06.3. Indicate whether your organisation has any off-balance sheet assets [Optional].

Yes

06.5. Indicate whether your organisation uses fiduciary managers.

Yes, we use a fiduciary manager and our response to OO 5.1 is reflective of their management of our assets.

No, we do not use fiduciary managers.

06.6. Provide contextual information on your AUM asset class split. [Optional]

The asset class mix disclosed is based on the net asset value of the financial investment assets managed by Treasury at financial year end. Treasury provides a range of investment solutions on behalf of the ACT Government and other Government-related stakeholders that are designed to achieve various investment objectives.

Treasury does not manage any investment assets internally or use fiduciary management. Several external, wholesale fund managers are appointed across different asset classes to manage the financial investment assets.

OO 07. Fixed income AUM breakdown

07.1. Provide to the nearest 5% the percentage breakdown of your Fixed Income AUM at the end of your reporting year, using the following categories.

Externally managed

60 SSA

20 Corporate (financial)

5 Corporate (non-financial)

15 Securitised

Total 100%

OO 08. Segregated mandates or pooled funds

New selection options have been added to this indicator. Please review your prefilled responses carefully.

Provide a breakdown of your organisation’s externally managed assets between segregated mandates and pooled funds or investments.

Asset class breakdown	Segregated mandate(s)	Pooled fund(s) or pooled investment(s)	Total of the asset class (each row adds up to 100%)
[a] Listed equity	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[b] Fixed income - SSA	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[c] Fixed income – Corporate (financial)	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[d] Fixed income – Corporate (non-financial)	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[e] Fixed income – Securitised	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[f] Private equity	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[g] Property	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[h] Infrastructure	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[n] Cash	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[o] Money market instruments	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%

08.2. Additional information. [Optional]

Treasury uses of a combination of both segregated mandates and pooled funds, including:

directly through an actively-managed strategy using a separate discrete mandate (Territory directly owns the securities) where the fund manager aims to outperform the relevant performance benchmark index (gross of fees);
directly through an index-managed strategy using a separate discrete mandate where the fund manager aims to match the relevant performance benchmark index (gross of fees); or
indirectly through an actively-managed or index-managed strategy utilising unlisted pooled funds where the fund manager aims to outperform the relevant performance benchmark index (gross of fees) or match the relevant performance benchmark index (gross of fees).

Treasury acknowledges there can be investment control limitations in circumstances requiring the use of unlisted pooled funds. However the use of pooled funds for specific asset class investments can provide key investment benefits including more efficient and effective investment implementation, improved investment diversification, improved investment liquidity, access to professional management, access to asset class market-based returns, cost effectiveness, asset transparency and investment administration efficiencies. These benefits can outweigh alternate investment implementation solutions that may otherwise be administratively impractical, less diversified, less transparent, more expensive or more resource intensive.

OO 09. Breakdown of AUM by market

09.1. Indicate the breakdown of your organisation’s AUM by market.

100 Developed Markets

0 Emerging Markets

0 Frontier Markets

0 Other Markets

Total 100% 100%

09.2. Additional information. [Optional]

Treasury does not directly invest in any emerging, or frontier, markets or individual market securities. Treasury does not consider direct ownership of emerging, or frontier, market securities as practical or cost effective due to onerous custody market and AUM requirements through the use of segregated mandates, excessive fund management and investment administration costs, individual market and country tax complexities, and reporting and disclosure limitations. In addition, these markets/securities do not meet Treasury's investment risk objectives.

Treasury acknowledges a very small residual exposure to emerging market sovereign bond securities (less than 0.3% of total AUM) through investment in an investment grade international fixed interest sovereign bond pooled fund, which seeks to track the return of the Bloomberg Barclays Global Treasury index (hedged to Australian dollars) before taking into account fees, expenses and tax.

Investment in emerging, or frontier, market securities can result in increased financial risks as a result of less developed capital markets and lower market liquidity, less developed governance and legal frameworks, increased geo-political risks and increased currency risks. There is also an increased potential risk for conflict with the ACT Government's Responsible Investment policy framework.

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