Perpetual Limited

AUSTRALIAN MARKET ENTRY context, contacts and commercial considerations when establishing a presence in Australia

Matthew Allen, Associate Director and Lawyer Perpetual Corporate Trust Perpetual Limited

PERPETUAL INVESTMENTS PERPETUAL PRIVATE PERPETUAL CORPORATE TRUST

SPECIALISED PERSONAL ADVISORY CORPORATE ASSET MANAGEMENT TO HIGH NET WORTH SEGMENTS FIDUCIARY SERVICES

Broad range of products and Tailored financial advice Leading provider of trustee services for investment, on investments, superannuation services in Australia including superannuation and and retirement planning, mortgages, custody, retirement across both asset protection and insurance, unit registry, accounting retail and institutional markets; debt and tax management, as well as trust management and all asset classes. estate planning and philanthropy. and compliance services.

FUM A$23 billion FUA A$8 billion FUA A$277 billion

• 47 different investment strategies • 500 funds on platform 3rd party •$60 billion 3rd party funds • 35% institutional • 17 3rd party in model portfolio •Over 320 schemes • 65% retail •All asset classes • $3 billion multi manager • Over 50 3rd party allocations

OUR EXPERIENCE AND TRACK RECORD ACROSS THE FUNDS MANAGEMENT VALUE CHAIN

FUM/FUA as at 30 June 2012 2 Your Australian Strategy

LONG TERM INVESTMENT

Market Entry Distribution Regulatory Mandates Analysis Strategy Environment

• Competitive landscape • Fly-in / Fly-out • Licensing Investors have 3 ways to • Key segments • 3rd party distribution • Regulatory changes invest with you: • Intermediaries partnership 1.Direct into offshore funds • Gatekeepers • “Man on the ground” 2.Segregated mandates 3.Onshore funds (ie. Australian domiciled vehicle)

3 Success in Australia’s large superannuation market requires a clear strategy and an understanding of the local playing field

AUSTRALIA’S $1.4 TRILLION SUPERANNUATION MARKET • A large and growing capital opportunity underpinned by Australia’s compulsory Future Fund Self Managed $75b Super Funds superannuation saving system Company Super $412b Funds $60b • However….Australia’s market is mature, highly diverse and Public Sector sophisticated Funds $202b • Success requires: – A clear segment strategy – Access to the right local decision makers Retail Wealth – An understanding of local Industry Funds Industry $250b $370b investment trends and rules

INSTITUTIONAL (43%) RETAIL (57%) $590bn $780bn

Source: June 2011 - APRA, Plan For Life, Morningstar and Tria Investment Partners 4 Institutional: Careful targeting of fund clients and asset consultants will greatly enhance the chance of success

Diverse institutional fund market Asset Consultants advise on 67% of assets – largest fund has only 13% market share – an important relationship

AUSTRALIAN ASSET CONSULTANTS BY INSTITUTIONAL MARKET TOP 3 PLAYERS @ JUNE 11 MARKET SHARE – DEC 2011 SEGMENTS

JANA 35% 1.AustralianSuper = $43bn Industry Super Funds 2.Unisuper = $29bn Frontier 28% 3.REST = $20bn

Mercer 14% 1.QSuper = $32.7bn Government Super Funds 2.State Super NSW = $32bn 3.First State Super = $31bn Russell 9%

1.Telstra = $11bn Ibbotson 8% Company Super Funds 2.CBA = $7bn 3.Qantas = $6bn Access 2%

Sovereign Wealth Fund 1.The Future Fund = $75bn Sovereign 1%

Source: Tria Investment Partners, Rainmaker 5 Retail: Partnering with the right local distributors is key

Retail Wealth Market – the top 6 players Australia’s Self Managed Super Fund (SMSF) represent ~80% of super assets market is very large and fragmented

TOP 6 WEALTH GROUPS BY SUPERANNUATION ASSETS • The largest single superannuation segment in the Australian market at A$412 AMP $69b billion MLC / NAB $60b • A segment which collectively is larger than BT / Westpac $59b all but a handful of sovereign wealth funds Colonial First State / CBA $54b globally – however highly fragmented OnePath / ANZ $32b • Lack of large distribution hubs can present IOOF $18b challenges • Careful consideration required before Gaining access to financial planner targeting this segment – perhaps a longer investment menus and platforms is critical term or secondary opportunity Retail wealth groups seek Investment Financial Platform to control the Funds Planners distribution value chain

Source: Tria Investment Partners, Rainmaker 6

What Distribution Strategy is right for my fund?

OPTIONS AVAILABLE

3rd Party “Man on the Fly-in / Fly-out Distribution/ Ground” Partnership

7 The changing regulatory environment – key considerations

LICENSING REGULATORY CHANGES

• Need an Australian Financial Services • Mysuper Licence unless exempt • Superfund Disclosure • SEC / FSA exemption available • FOFA − Streamlined application process (2 weeks) − Wholesale clients only − Some ongoing notification and reporting requirements

Source: Henry Davis York 8 Australian domiciled vehicle: Determined by distribution strategy, target segment and investor preference

There are both regulatory and commercial TYPICAL ONSHORE STRUCTURE considerations in establishing an Australian fund

Registered Fund Unregistered Fund Constitution Investment Custodian Manager Regulatory requirement Wholesale Investors only (ASIC)

PerpetualPerpetual as No intention to attract retail RE/Trustee Wrap/Platform RE/Trustee money

Disclosure based regime Less disclosure and “Clear, concise and reporting obligations Tax/Audit effective” Administration Agent Investor Recognition regarding Cost compliance and regulation

9 Your Australian Strategy

LONG TERM INVESTMENT

Market Entry Distribution Regulatory Mandates Analysis Strategy Environment

PERPETUAL IS AN IDEAL PARTNER TO HELP YOU DEVELOP AND IMPLEMENT YOUR STRATEGY

1 0 Contact Details

Matthew Allen Associate Director and Lawyer Perpetual Corporate Trust Level 12, 123 Pitt Street Sydney NSW 2000 Australia Landline: +61 2 9229 9618 | Fax: +61 2 8256 1422 Cell: +61 420 304 662 Email: [email protected]

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