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.<\/p>\n
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.<\/p>\n
“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.<\/p>\n
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.<\/p>\n