Table of Contents

Research Handbook on Hedge Funds, Private Equity and Alternative Investments

Research Handbook on Hedge Funds, Private Equity and Alternative Investments

Research Handbooks in Financial Law series

Edited by Phoebus Athanassiou

This unique and detailed Handbook provides a comprehensive source of analysis and research on alternative investment funds in the EU, the US and other leading jurisdictions.

Chapter 16: Hedge Funds, Private Equity and Alternative Investment in Australia

Alex Erskine

Subjects: economics and finance, corporate governance, financial economics and regulation, law - academic, finance and banking law, law -professional, finance and banking law


Alex Erskine* INTRODUCTION The Australian managed funds industry held AU$1.7 trillion (US$1.69 trillion) in assets and was ranked the fourth largest in the world and largest in the Asia Pacific region in December 2009.1,2 The managed funds industry has grown by a compound annual growth rate of 11.9 per cent since 1992. The industry’s funds under management (FUM) have nearly doubled since 2003.3 A number of factors have driven the growth of the Australian managed investment industry in general and the alternative investment sector in particular. Firstly, the Government introduced compulsory superannuation4 (retirement) savings in the early 1990s. That resulted in a substantial growth in superannuation accounts (see Figure 16.1). Some superannuation monies were in turn invested in the alternative investments industries, facilitating growth and the achievement of economies of scale and scope. * Alex Erskine is Chief Economist, Australian Securities & Investments Commission. Also contributing were Jeremy Bray, Li-Ling Chew, Ben Durnford, Dr. Pamela Hanrahan, Paulo Pinto, Trinh Quach, Dr.  Shane Worner, Grantly Brown, Marie-Christine DeGreeff, and Geoff McCarthy. This chapter contains personal views which do not necessarily represent the view or policies of the Australian Securities & Investments Commission or its Commissioners. The contents of this chapter were finalized on 19 January 2011. 1 Australian Trade Commission (2010), Investment Management Industry in Australia, Canberra, Australia. 2 Exchange rate of AU$ 5 US$99.96 as at close of 18 January 2011. This exchange rate is used throughout the chapter unless otherwise stated. 3 Australian Trade Commission (2010), Investment Management...

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