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
First Sentier Investors chief executive, Mark Steinberg, is set to depart the asset manager after seven years.
Metrics Credit Partners has completed the acquisition of Taurus Finance Group and BC Investment Group as it looks to launch consumer lending arm Navalo.
AMP has announced to the ASX that it is being sued by property fund manager Dexus regarding the sale of its real estate and domestic infrastructure equity business.
Having seen inflows of US$5.6 billion to its fixed income funds in the last quarter, Janus Henderson has closed on a deal with life insurer Guardian to secure funds to boost its product development.
