AUSTRALIA Trends and Developments Contributed by: Andrew Stone, Dhanushka Jayawardena, Andrew Choi and Chris Kinsella, Holding Redlich
Holding Redlich Level 65 25 Martin Place Sydney NSW 2000 Australia Tel: +61 2 8083 0388 Email: inquiries@holdingredlich.com Web: www.holdingredlich.com
The Impact of Global Mega-Trends and Unique Domestic Characteristics on the Australian Alternative Investment Funds Industry The Australian alternative investment funds industry operates within a complex web of global and domes - tic influences that are reshaping the investment land - scape. As of 2 October 2025, the industry faces both challenges and opportunities driven by evolving global and Australian market conditions, regulatory changes, and investor preferences. This analysis explores the key trends affecting alternative fund managers in Aus - tralia, examining how global developments are influ - encing local markets and potential implications for the future of the industry in Australia. Global trends affecting Australia Retailisation of alternative investment strategies One of the most significant global trends affecting Australia is the retailisation of alternative investment strategies. Traditional institutional-only strategies are increasingly being packaged for retail investors through various structures. This trend has found fertile ground in Australia’s retail client investment market, supported by strong Australian median wealth (with one recent study ranking Australia second globally, behind Luxembourg). That wealth is underpinned by very highly priced Australian residential real estate. International and Australian managers are adapting by creating more accessible products, implementing lower minimum investment thresholds, and develop - ing education programmes to help retail investors understand alternative strategies. This democratisa - tion of private markets is fundamentally changing the competitive landscape for fund managers.
Liquidity challenges in alternative strategies The global challenge of providing liquidity in alterna - tive investment strategies has intensified, particularly as retail investors demand more flexible redemption terms. Australian managers face the complex task of balancing the inherently illiquid nature of many alter - native assets with investor expectations for liquidity access. This challenge has driven innovation in fund struc - tures, including the development of semi-liquid funds, evergreen structures, and secondary market solutions. The tension between liquidity provision and optimal investment returns remains a critical consideration for fund managers as they design products for different investor segments. M&A and joint venture activity Globally, private market managers are acquiring tra - ditional fund managers with retail investor distribu - tion capabilities. This reflects that retail private market distribution requires scale and expertise that can take many years to develop. There is evidence of this trend playing out in Australia, with local and international alternative investment managers on the one hand and Australian retail distributors on the other hand enter - ing into management and distribution arrangements of different kinds. Model portfolio integration The adoption of model portfolios that integrate alter - native strategies has gained momentum globally and is influencing Australian investment platforms. Model portfolio providers that incorporate private equity, private credit, real estate, infrastructure, secondaries
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