The incoming head of a multi-billion dollar Commonwealth fund has warned risk will be inevitable as part of efforts to boost Australia's manufacturing sector.
Ivan Power has been appointed as the chief executive of the $15 billion national reconstruction fund.
A chartered accountant and adviser and investor with the Macquarie Group for more than 20 years, Mr Power will lead efforts by the fund to grow industrial capability and innovation.
The fund aims to drive investment in seven priority areas: resources, agriculture, transport, medical sciences, renewables and low-emissions technology as well as defence.
Mr Power said he was eager to hit the ground running, with a long list of potential projects the fund could oversee.
"We need to be investing on a commercial basis," he told AAP.
"We need to be responsible in how we do that and sustainable.
"There will be swings and roundabouts within that, and that's part of my job and the job of the board is to ... manage that in that portfolio towards those return metrics and risk metrics.
"We've got to be assessing, pricing and managing risk in a very prudent way but we also need to be able to take risk."
The fund's investment mandate will aim to make a return of two to three per cent more than the government bond rate.
Decisions on what the reconstruction fund chooses to invest in the priority areas will be made independently of government.
However, the fund is barred from investment in projects that include coal, natural gas extraction or native forest logging.
Mr Power said the fund would allow future generations to have greater choice about the careers they were able to pursue in Australia.
"I want to make sure that they have an opportunity to have a real diversity of the types of jobs that they want to be doing and the types of things they want to do," he said.
"We want to make sure when (global talent is) making decisions about where it is they want to base their lives and to come, we want them to be able to say that they want to be able to come to Australia to do this."
Industry Minister Ed Husic said the fund would help boost Australia's manufacturing strengths.
"Being able to rebuild sovereign capability and having a dedicated capital platform to help progress that (is) really important," he said.
"Average Australians want Australia to be a country that makes things.
"They recognise the value of manufacturing."
