Resurgent alternate sector driving asset management opportunities

Media Release
Resurgent alternate sector driving asset management opportunities in
Australia and offshore
21 May 2015
There is increasing opportunity for local investment managers to raise capital in overseas
markets as investors globally seek real returns in a low growth world, according to Perpetual
Corporate Trust (Perpetual).
At a recent event in Sydney, Tapping into the World’s Capital, Perpetual brought together
select global fund specialists to share insights with local asset managers into what today’s
retail and institutional investors are looking for, and strategies for attracting capital from
offshore markets.
A consistent trend with investors locally and across offshore markets is the rise of alternatives
as investors look for ways to secure above inflation returns in a low growth world.
“The average global cash rate has fallen from 4.5% in 2007 to 0.5% today and the 10 year
bond yield from 4.5% to 1.5%,” said Matt Sherwood, Head of Investment Strategy, Multi
Assets. “In this environment investors need to move away from the benchmark and focus on
investment opportunities. This is the very definition of real return investing.”
A number of global investment specialists reinforced this theme as they discussed current
trends for local managers in Europe, US, Latin America and Asia. Their key observations
were as follows:

In the United States there has been a definite shift to alternative assets, with flows into
alternative strategies tripling in the past five years and assets under management now
totalling over US$2 trillion as investors are increasingly looking for alternative, noncorrelated assets.

European investors have already shown appetite for investing in the region, with a
quarter of all offshore investment from Europe directed to the Asia-Pacific.

Conversely, Latin American allocation to Australia is today less than one per cent of
total AUM, representing significant opportunities for local investment managers,
especially for strategies targeting “Instaviduals” - HNW and family offices that are
individuals but act like institutions.

Regionally, the Asia Funds Passport is an important development in helping to
eliminate legislative barriers and making investing across borders in the region more
seamless.
Perpetual Limited
ABN 86 000 431 827
Angel Place, Level 12, 123 Pitt Street
Sydney NSW 2000, Australia
GPO Box 4172, Sydney NSW 2001, Australia
Tel +612 9229 9000
Fax +612 8256 1494
investor.relations@perpetual.com.au
Global managers also eyeing Australian investors
While Australian investment managers are increasingly looking to global markets, Perpetual is
also seeing significant growth in global fund managers entering the Australian market especially in alternatives - as local investors look to diversify beyond traditional asset classes.
“The hedge fund industry has doubled since the global financial crisis and in 2014 we saw
more flows into hedge funds than in any year since 2008,” said Rupert Smoker, Acting
General Manager, Regulated Fiduciary Services for Perpetual.
“Local investors are looking to increase their allocations to multi-asset strategies that perform
in good and difficult market conditions. While global investment managers recognise our
mature market and are looking for the right partners to tap into this investor demand.”
Perpetual, which provides Responsible Entity and Trustee services for global asset managers,
said eight of its 15 mandates over the past 18 months came from global alternative managers
with global alternatives now accounting for a third of Perpetual’s total FUA within its
responsible entity business compared to less than a quarter at the start of 2014.
Ends
For further information, please contact:
Jarrah Aguera
Honner Media
jarrah@honnermedia.com.au
Tel: 02 8248 3745
About Perpetual
Perpetual is an independent financial services group operating in funds management,
financial advisory and trustee services. Our origin as a trustee company, coupled with our
strong track record of investment performance, has created our reputation as one of the
strongest brands in financial services in Australia. For further information, go to
www.perpetual.com.au
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