Treasury reforms, financial innovation and growing demand is driving interest in Australia’s hedge fund industry, according to the Alternative Investment Management Association (AIMA), the global hedge fund industry association.
Currently managing AUD96.9 billion (US$67 billion) in assets, according to the Australian Securities and Investments Commission (ASIC), this renewed interest is set to drive Australia’s hedge fund industry through the AUD100 billion mark, and continue strong growth that saw assets managed by hedge funds increase more than 45 per cent from 2012 to 2014. ASIC data also showed that in 2014, Australia’s largest hedge funds reported average returns of 15.6 per cent, low leverage levels and adequate liquidity.
“We’re at an inflection point where subdued equity and debt markets are setting an extremely positive backdrop for hedge funds to become the fastest growing segment of the Australian investment management market,” says Paul Chadwick, AIMA Australia Chairman. “With innovative strategies coming to market, from alternative beta to strategies that target the capital lending functions once dominated by banks, we expect the number and types of hedge fund strategies to grow significantly.”
Chadwick’s positive sentiment is likely to be echoed at the 2015 AIMA Australia Hedge Fund Forum next week featuring international and local leaders, including global industry icons, Steve Kuhn, Partner & Co-Chief Investment Officer of Pine River Capital Management of the US, and Sandy Rattray, CEO of Man AHL from London.
Jack Inglis (pictured), CEO of AIMA, also brings to the 2015 AIMA Australia Hedge Fund Forum a global perspective on how hedge fund sectors are evolving around the world.
“Australia is growing strongly, with local AIMA membership having grown over 25 per cent in the last 18 months. This reflects the region’s depth of hedge fund talent, tenacity and investor engagement,” says Inglis. “Since its Investment Manager Regime (IMR) was legislated earlier this year, we understand that a number of hedge fund management firms based internationally have been considering establishing operations in Australia. The certainty and clarity provided by IMR allows commercial considerations to be explored more fully, which is enormously encouraging for industry growth.
“We look forward to representing an increasingly diverse, dynamic and thriving hedge fund community in Australia and to working with regulators and industry leaders to ensure this community can achieve its full potential for investors.”
Key topics to be discussed at the 2015 AIMA Australia Hedge Fund Forum are the rise and implications of alternative beta and big data, the future of hedge fund research, the prospects for alpha generation and the outlook for CTAs.
