Asia Pacific continues to be the biggest source of investment into managed funds, according to a report by the FSC and The Trust Company.
Released yesterday, the second annual Australian Investment Managers Cross-Border Flows Report found investment flows into Australia have increased by 78 per cent since 2010, with Asia accounting for 66 per cent of all fund flows, followed by Europe (including the United Kingdom) at 24 per cent.
Collectively, Europe and Asia account for 90 per cent of all fund flows into Australia.
FSC chief executive John Brogden believes the report shows the massive potential export market for Australian financial services, and estimates that revenue from the management of overseas funds could inject as much as $700 million into the Australian economy each year.
“It is clear the Asia Pacific region holds large, untapped opportunities for the Australian financial services industry, with phenomenal potential for Asia to quickly increase its overall share of funds management activity,” Mr Brogden said.
“Australia needs to ensure it is positioned to capitalise on this."
Australian funds management expertise is widely recognised across the region, The Trust Company chief Shailendra Singh said.
“In addition to good levels of inflows into Australia, our managers have invested approximately 24 per cent of these flows in offshore assets,” Mr Singh said.
The stability of Australia’s economic and political environment has attracted a large proportion of fund flows from Asia in Australian fixed interest and cash, he said, adding that this asset class comprised 49 per cent of all cross-border investment.
The report findings also show fund managers are the largest source of inflows at 37.5 per cent, followed by pension funds at 31.6 per cent.
