Hall & Wilcox partner Harry New said the “faster” 12-month period for the PIV could create issues for fund managers around how they can structure their products.
“The short-term nature of the proposal raises some issues around how fund managers can structure their products in a way that attracts investment yet provides adequate protection,” Mr New said.
“Many fund managers will question the merits of attracting inflows which may only last 12 months,” he said.
Mr New also said the existing SIV scheme, which has recently seen investors flock to government bonds, showed that linking foreign funds with visas “is not necessarily the gold mine often portrayed”.
“Fund managers are finding that they need to be prepared and willing to adapt to a different market,” Mr New said.
“For example, there are certain cultural requirements to consider. A product that is attractive to Australian investors may not attract foreign investors,” he said.
“You also need to establish strong distribution networks, including access to third parties and other investors,” Mr New said. “There is also significant uncertainty in relation to what are complying investments for the PIV, and how the nomination process for the PIV will work.”
