However, Liddy says that NAB has already spoken with a lot of managers and about 90 per cent would agree to participate if the client wanted them to. “We would have been happy with a lower success rate than that,” he says. “But managers also agree there should be as little leakage as possible.”

Clearly, some super funds and multi-managers will have more influence than others in this regard. The potential ramifications if the master manager idea really takes off are much greater than the incomes of some brokers and funds manager dealers. The master managers could represent massive new ‘dark pools’ of liquidity – those sources of stocks and bonds available for off-market trades. Dark pools are expanding faster than exchanges in Europe and the US, which has been one of the prompts for the M&A activity among exchanges over the past few years.

If super funds were to pool their assets, at least for some of the cost-saving activities such as crossings and transition management, the master manager concept could similarly affect other traditional businesses. While most of the early attention is being focused on Australian equities, there is no reason, in theory at least, why master manager could not be used across all asset classes.