Encouraging the self-interest of Asia’s financial centres is, he says, the best way to make the passport real. Passport to profits The Asia funds passport was originally put to the Australia as a Financial Centre report (colloquially known as the Johnson Report) by the funds management industry’s peak body, the Financial Services Council (FSC). It aims to go beyond a series of bilateral agreements to form a multilateral framework permitting the crossborder marketing of funds. It would clear existing regulatory barriers – from the licencing of funds managers to barring the use of leverage or investments in particular asset classes – so the buying and selling of funds among participating markets would be streamlined. Weir will soon be presenting the idea to the Singaporean and Hong Kong authorities, and other members of the Asia-Pacific Economic Co-operation forum, in an attempt to ensure it is discussed at the meeting of the forum’s finance minister later this year. It is one of the many channels that can be used to negotiate the passport. He says it’s important that the idea isn’t portrayed as an Australian plan to further our interests alone.
“If it’s going to emerge, it has to as a regional initiative with regional support and drive,” he says. But some say Australia has left its run at exporting success a decade too late. “They’ve blown it. Singapore and Hong Kong have killed it, and Shanghai will emerge,” says Peter Sartori, CIO of Treasury Asia Asset Management. For the 15 years Sartori has worked in Asia, the Australian Government has talked about promoting itself as a regional champion while major contenders Singapore and Hong Kong did not delay the internationalisation of their financial systems. The growth of the Australian funds management industry, he says, will continue to be tied to superannuation inflows. Sartori, who lives in Singapore, says the island state is now known abroad as an Asian base for private banking. In the past 20 years, many international funds managers have moved in, showing the way for other European and US firms. “It feeds off itself now,” Sartori says.
“It’s reached that critical mass.” Lindsay Mann left Australia for an expatriate career in funds management soon after the superannuation guarantee took effect. Most of his work was conducted in Asia, and his most recent posting was with First State Investments in Singapore. He saw scarce demand for Australian equities and fixed-income products, and intense competition among managers for access to the country’s private bankers. Mann says Australian managers with aspirations to sell into Asia should not wait for any passport to emerge. “For as far as I can see, you need to establish product on a global platform,” he says, flagging UCITS as a means of doing this. Don’t wait another 10 years, he warns. Jack Lin is another experienced funds manager in Asia urging Australia to not waste any more time. As the co-chief executive officer of Janus Capital International, based in Hong Kong, and a former business-builder with Templeton in China and Korea, he believes Australia is still a contender for regional funds management supremacy because its market is the most sophisticated.