insto - Australian financial markets

The European UCITS funds management model could become a global standard for the industry and develop into the pan-Asian funds passport recommended by the Johnson Report, the Australian Financial Centre’s Mark Johnson says.

Speaking at a roundtable sponsored by Mallesons Stephen Jaques last month, Johnson said that the UCITS model, conceived in Europe in 1985, was spreading throughout the world.

Australia's market in Exchange Traded Funds (ETFs) is set to double by the end of 2011, according to a visiting executive from provider BlackRock. Speaking at a Sydney function, BlackRock's global head of ETF Research and Implementation, Deborah Fuhr, said Australian demand for ETF's was outpacing growth in the rest of the world. "The ETF industry is Australia has more than tripled over the last three years from $849 million assets in 2007 to $3.2 billion at the end of June 2010 and, consistent with trends worldwide, we expect this growth to continue," Fuhr said.

Australian hedge fund Basis Capital has joined the queue in taking legal action against Goldman Sachs, with a $1.5 billion legal action pending over the fund’s investment in a toxic mortgage linked security. Former Fairfax chief Fred Hilmer, the Myer Family and Westpac board member Stuart Hornery are among the investors who lost out in the so called “Timberwolf” transaction which saw the Basis Yield Alpha Fund invest in collateralized debt obligations packaged and sold by Goldman.

Northern trust has picked up some major custody mandates in Australasia with Australia’s Future Fund and the NZ Superannuation Fund. the bank is rolling out a new technology platform around the world and two senior executives visited Australia recently to meet with clients.

The Australian Stock exchange’s monopoly on local equities trading will end in October when the Nomura Holdings-owned Chi-X opens for trade. Global high frequency traders are on their way, but is that a good thing?

Credit Suisse’s director of alternative investments Richard Quin finds himself the new head of a boutique investment management firm after last week’s purchase by Challenger Asset Management.

Challenger has paid an undisclosed sum for Credit Suisse Investments (Australia), which has $1.5 billion in five separate funds under management in addition to two property funds with $290 million.

Northern Trust has picked up some major custody mandates in Australasia with Australia’s Future Fund and the NZ Superannuation Fund. The US bank is rolling out a new technology platform around the world and two senior executives visited Australia recently to meet with clients.

As part of our 2009 review, Insto caught up with Tony Cripps, Head of Global Banking and Markets, HSBC Bank Australia.

How has investment banking in Australia changed during 2009

Standard & Poor’s is facing $40 million in legal action over its rating of an AAA debt instrument, which slumped in the global financial crisis.

Mark Johnson chaired the Australian Financial Centre Forum’s report “Australia as a Financial Centre: Building on our Strengths” which was released for discussion in January. The report made 19 specific recommendations to the government, from tax reform to changes to corporate bond structures, designed to facilitate growth in the financial sector, and a greater inter-reaction with Asian markets. Mark Johnson spoke with Insto soon after the report was released.