Cash-rich Australian mutual funds are exploring a broader range of strategies, and hedge funds are eyeing overseas markets, driving growth in the country’s increasingly competitive prime brokerage market.
Australia’s mandatory superannuation pension scheme now holds roughly $600 billion and a good chunk of new inflows before a tax exemption cut off date on June 30 is expected to trickle into more aggressive investment vehicles.
“A number of these (superannuation) funds are looking at the alternative investment space, putting money into fund of funds, and also looking at their own long-short strategies,” said James Jennings, head of Australian prime services for Deutsche Bank.
These new participants are entering the alternative market while existing hedge funds are expanding their portfolios beyond Australia, creating a range of new opportunities for international prime brokers, which offer hedge funds services like loans, stock lending and trade execution.
