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Splurging on emerging markets

Australia’s superannuation funds and banks, collectively managing hundreds of billions of dollars, are bulking up their fund management teams with emerging markets specialists.

The Victorian Funds Management Corporation (VFMC) alone is said to be looking for up to 40 fund managers to look at different asset allocation strategies and investment schemes. Macquarie Bank also has just launched its MQ Gateway Trust investment program, with its primary focus on emerging Asian markets.

Oliver Darkes of Carmichael Fisher says the domestic Australian banks – NAB, ANZ, Commonwealth Bank, Westpac and Macquarie – are primarily handling their emerging markets activities from Australia and all have been building up their fund management teams in the area.

“The super funds can’t find people quick enough. If you look at businesses like VFMC, UniSuper and the Future Fund … those guys (VFMC) are talking about bringing on 40 people,” Darkes says. “Those super funds, which have massive direct investments instead of relying on an asset consultant, are definitely taking on more people to explore the emerging markets because they’re sitting on billions and billions of dollars that they don’t really know what to do with just yet.”

Caan Krsztew Ivanow of Graeme V Jones & Associates says that while 50% of the emerging market market is run from Asia, there’s also plenty of activity in Australia: “Equity managers in Australia have stated that they would be putting money into Singapore and Hong Kong. All the money from Australia is mainly being invested by superannuation funds as well as targeted high-net-worth retail money.”

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