As many as six foreign asset managers come through the doors of the Financial Services Council every year interested in acquiring a stake in an Australian fund manager in order to enter an $1.8 trillion market.
“Four to six times a year foreign fund managers come through our doors seeking opportunities to enter the market,” says John Brogden, chief executive of the FSC. “We are on the horizon of fund managers of the world because of our size.”
Brogden declined to name any asset managers who may be seeking to acquire others.
He says there are domestic pressures on Australian funds to considers mergers or force takeovers.
Superannuation funds are managing as much as 30 per cent of their investments internally, says Brogden. Moreover margins are crimping for asset managers.
The largest superannuation funds demand lower costs from their fund managers. The average balanced superannuation fund had a 0.6 per cent gain in 2011, according to analysts Chant West.
“It’s a ruthlessly competitive sector,” says Brogden.
He expects more Australian fund management companies to look to Asia to grow their business. Assets under management are growing due to compulsory superannuation reaching their domestic investable limit.
Brogden hopes Asia-Pacific Economic Cooperation finance ministers this year will approve a common fund product and harmonize regulatory standards so a fund issued by one can be sold in many countries.
The 2012 APEC meeting will be held in Vladivostok, Russia.