Funds passport can add $100 billion to Australian sector
The Asian Funds Passport has the potential to add $100 billion to the Australian Funds Management sector even from a moderate increase in the number of foreign investors accessing Australian domiciled products, according to the head of an Asian based fund manager.
Nikko Asset Management Australia managing director, Sam Hallinan, said his group, which is headquartered in Japan, has examined the potential for the Australian market and found that at present four per cent of fund management assets as sourced offshore from the Asian region.
"If we can double that to eight per cent, that represents a further $100 billion added to the local funds management sector via the passport," Hallinan said.
He said the mechanics of the passport would allow Australian funds to be offered into other jurisdictions as they stand with a ‘wrapper', which would include any specific localised regulations. This would be a two-way operation with overseas funds offered into Australia on the same basis.
However, Hallinan said Australia needed to work on making its funds more attractive to Asian investors by bringing its Collective Investment Vehicle structures and tax equalisation measures in line with its passport partners.
"People overseas are looking to Australia as we have a $2.5 trillion market with depth and sophistication and there is thirst for income in the Asia Pacific region," Hallinan said.
Hallinan said Nikko was already working on adapting Australian products, mainly around the income generating space, and expected to roll them out first into Singapore.
AUTHOR
Jason Spits
Recommended for you
Grant Hackett has been promoted from CEO of Generation Life to head up the wider Generation Development Group.
Tribeca Investment Partners has made a distribution hire from Australian Ethical in a newly-created role focused on the national intermediary market.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
