“It’s Australia’s race to lose,” he says. “Assets are going to accumulate in this region more than in others, and they will be deployed in this region because of home-country bias. “Australia probably has a window of five-to-10 years to seize this opportunity. China’s capital markets are currently closed, and while the assets are accumulating onshore, they can’t be invested internationally. But if and when the day comes that capital does flow, you can almost be sure that it will mandate – by sheer weight of capital – that Hong Kong will be the regional centre.” Clearly, we have a a lot of work to do. Updated figures from the Johnson Report finds that just $53 billion of the domestic industry’s $1.7 trillion in funds under management is sourced from offshore investors. This represents a fraction of the pie. Singapore already raises 80 per cent of the capital in its funds management industry from overseas, and Hong Kong taps offshore investors for 64 per cent of its managed assets. In comparison, Australia’s progress in regional fundraising is nothing but sluggish. Weir is fully aware of this, and to draw an analogy, compares Australia’s position to the tens of thousands of entrants in Sydney’s annual City2Surf fun run from Hyde Park in the city’s centre, up the notorious 2 km ‘heartbreak hill’ to Vaucluse and on to Bondi Beach. “We’re at the Rose Bay shops and have Heartbreak Hill ahead of us,” he says.
Same region, worlds apart For Australia, funds management is a knowledge industry supported and honed by superannuation inflows. It’s widely believed that these skills should be exported to Asia along with our natural resources. “As a sector, we should be leveraging off our skills,” Weir says. “The companies that have the capacity should be seeking funds offshore.” Some do, and have telling frontline stories. Their first pointer is: look past the headline economic growth and national savings rates, and carefully assess the distinctions between markets. Anthony Fasso, who has also worked in Asia for 15 years and is currently AMP Capital Investors’ director of international business, says it’s a very tough region to sell into because of its diversity. Ideas of Asia as an entity must be discarded and individual markets seen for what they are. “It’s easy to sit at a strategy desk in Sydney, Paris, London, and look at the high savings rate. It looks very appealing on PowerPoint,” Fasso says.