Sometimes you just have to call it quits. That’s what Australia’s Future Fund did last month when it paid A$7 million (€4.8 million; $5.4 million) to AustralianSuper, the country’s biggest industry superannuation fund, to settle a long-running legal battle over its purchase of a stake in Perth Airport.
The move put an end to a two-year long dispute that saw the A$117 billion sovereign wealth fund accused of offering to pay over the odds to deter existing investors, which included AustralianSuper, from exercising pre-emption rights to increase their stake in the hub. Future Fund disbursed A$875 million for a 30 percent stake in Perth Airport three years ago, as part of a A$2 billion auction for The Australian Infrastructure Fund, which held stakes in several Australian airports.
The decision to settle the fight seems to have been taken on pragmatic grounds, with the institution not admitting any liability for the way it chose to bid for the asset.
“The Future Fund has always maintained that it has acted appropriately and properly at all times,” a spokesperson for the organisation commented by email. “The Future Fund has chosen to settle the lawsuit for purely commercial reasons, to avoid ongoing legal costs and to enable the Fund’s management to fully focus on the important task of continuing the strong growth of the Fund for the benefit of all Australians.”
In a statement, AustralianSuper said it was “very pleased” with the payment, “the majority of which” it reckoned would compensate for the alleged losses incurred by its members as a result of the Future Fund’s conduct. The A$7 billion sum includes a contribution to the pension’s legal costs.
Wendy Norris, who succeeded Raphael Arndt at the head of Future Fund’s infrastructure and timberland unit, recently said that the institution plans to continue developing its internal capabilities while still relying on manager relationships to deploy money.