Home / News / ‘Not just a piece of Britain’: Down Under open for funds innovation

‘Not just a piece of Britain’: Down Under open for funds innovation


The new corporate collective investment vehicle (CCIV) could create new markets for Australian fund managers and bring international managers to Australian shores.

Australia is still viewed as somewhat incurious about the region it inhabits, despite gesticulations at the fact that its countries are our largest trading partners. But the newly-created CCIV – due to commence in July – could soon allow for the two-way flow of funds management expertise between Australia and Asia in a move that will open our somewhat staid industry to international innovation.

“It creates a far more known entity from a regional perspective,” said APIR CEO Chris Donohoe. “There’d be no appetite and there is no appetite to take a trust structure up into Asia… You could try and do it, but they typically don’t have an interest in trust structures. It’s part of what they’re used to, and the complexity, and they’ve really baulked from them.”

Per Treasury, the CCIV is an investment vehicle with a corporate structure, with additional consumer protections in the form of an independent depositary for retail funds that is responsible for the oversight of certain administrative functions. A single CCIV can offer multiple products and investment strategies within the same vehicle.

It goes hand-in-hand with the existing Asia Region Funds Passport (ARFP) and is structured similarly to the existing European “undertakings for collective investment in transferable securities” (UCITs), which allow funds to be distributed across the EU and Asia.
The value proposition is obvious. Emerging markets managers often talk of tapping into the tastes of Asia’s growing middle-class, and the new vehicle could allow Australian fund managers to put their products in the hands of that continent’s nouveau riche. There’s “three trillion reasons why” Asian managers would want to bring their products here. While that’s mostly institutional money, it’s still viewed “as a very attractive marketplace”. APIR – which provides internationally recognised financial identifiers to products and market participants – also stands to benefit.  

Regulation will be dual, but the heavy lifting will have been done in the manager’s home jurisdiction, providing an “element of trust”. There are still some hurdles to this latest embrace of the Asian Century. Managers will have to have an agent on the ground – likely the local distribution lead – and managers and anybody called a distributor will have to have their AFSL altered. And fee sensitivity is rife in Australia, presenting one challenge to international managers who might look for a new home for their funds Down Under.

“The reality is that if they’re bringing in expertise, if they’re bringing in something different, if they’re bringing in something new then people will pay for that; that’s what you should be rewarded for, as far as your fee structures go,” said Andrew Dyster, general manager for client development at APIR. “But fees are always under pressure and if you’re going to bring something in, you’ve got to understand what the market’s acceptance of these things are.”

The creation of the CCIV was initially recommended by corporate adviser Mark Johnson in 2009. The Financial Services Council advocated for the CCIV to create new markets for existing fund managers, and the ATO, Treasury, and ASIC are all “pushing this thing reasonably hard” out of a desire for “harmonization”.

The sorts of managers that might want to take their products abroad remains “the million dollar question”; global fund managers are always “kicking tires”, and a few years back, when the ARFP was created, foreign managers – mostly Japanese and Korean – were knocking at APIR’s door. The local interest has died down, but ASIC is now approaching managers to get them into the process.

“I think they’re saying, “we need our financial world here not to just be sitting out here like a piece of Britain – it needs to work with the region itself”,” Donohoe said.

Print Article

Why taming the inflation tiger will be harder than the 1970s

Inflation is making a latter day comeback, and a financial system “sanitized by 15 years of free money” is totally unprepared. It’s time, once again, for tough medicine. Inflation hasn’t been this high in 40 years, but investors have become convinced that central banks can still tamp it down it with relative ease – a…

Lachlan Maddock | 27th May 2022 | More
Bragg offers a super manifesto (from opposition)

One of the Coalition’s few surviving  “super soldiers”, Andrew Bragg has called on his party to go further down the route of “flexibilising” super – if not abolishing it completely. Senator Andrew Bragg finds himself in a curious position following Labor’s election win. He’s one of the few super partisans to survive the teal clean…

Lachlan Maddock | 27th May 2022 | More
Appen left at the altar. Market heads lower. Good week continues for US markets.

Appen left at the altar A bizarre blink-and-you-missed takeover approach came and seemingly went for one of the local market’s tech leaders Appen, which develops the datasets for machine learning and artificial intelligence. Canadian company Telus International sprang a $9.50 a share bid on the company, which said it would talk to Telus to try to…

Drew Meredith | 27th May 2022 | More
News and OneVue go live with brightday
Alec Law | 11th Jan 2015 | More
Perrignon off to HK with Credit Suisse
Alec Law | 22nd Dec 2013 | More
Sports betting as a new asset class
Alec Law | 3rd Jul 2016 | More
BlackRock ahead of consensus with bullish view
Alec Law | 14th Jan 2017 | More
Statewide seeds bespoke Apostle fund
Lachlan Maddock | 23rd Mar 2022 | More
UniSuper’s VC foray a sign of things to come
Lachlan Maddock | 25th Mar 2022 | More