AUSTRALIA Trends and Developments Contributed by: Andrew Stone, Dhanushka Jayawardena, Andrew Choi and Chris Kinsella, Holding Redlich
Infrastructure and real estate funds that accept non- resident investors or sell interests in land-rich enti - ties will face increased CGT exposure and possibly increased withholding tax obligations. Indirect dispos - als such as the sale of shares or units in entities that are “land-rich” or have a close connection to Aus - tralian land or resources are particularly susceptible to these proposed changes. It will be necessary to retest acquisition and exit mechanics, update investor due diligence and sale documentation, and factor in increased withholding tax and compliance costs on cross-border deals. Stamp duty remains a state-by-state friction point States continue to vary transfer duty and landholder duty rates, thresholds and foreign surcharges. Trans - action costs, and unpredictability of the duty expo - sure, can materially affect real asset and infrastructure strategy economics. Future outlook and implications Regulatory developments The Australian alternative investment landscape will be significantly influenced by ASIC’s forthcoming regula - tory framework for private markets. Expected devel - opments include enhanced disclosure requirements, standardised valuation methodologies, updated guid - ance on managing conflicts through Regulatory Guide 181, and clearer liquidity management standards. AML/CTF (counter-terrorism financing) changes will also affect operational requirements for fund managers. Technology and innovation The continued integration of AI and technology solu - tions will reshape how alternative fund managers operate, from deal sourcing and due diligence to port - folio management and investor reporting. Australian managers are investing in technology capabilities to remain competitive with global peers. The democratisation of private markets through technology platforms will continue, enabling broad - er investor access while potentially commoditising certain investment strategies. Managers will need to differentiate through specialisation, performance, or unique access to deal flow and distribution capabili - ties.
Market structure evolution The ongoing shift towards open-ended structures and retail accessibility will fundamentally change market dynamics. Traditional closed-end, institutional-only strategies will coexist with more liquid, accessible products designed for broader investor bases. This bifurcation may create opportunities for manag - ers who can successfully operate across both tradi - tional and democratised segments. At the same time, it may potentially pressurise those unable to adapt to changing investor demands. Summary The Australian alternative investment funds indus - try stands at an inflection point, influenced both by global mega-trends and unique domestic charac - teristics. While challenges exist, including regulatory evolution and increasing competition, the fundamental strengths of the Australian market remain compelling. Australian alternative fund managers have demon - strated strong risk-adjusted performance, access to high-quality deal flow, and the ability to adapt to changing market conditions. The growing sophistica - tion of domestic institutional investors, the expansion of the family office sector, and the potential for retail market expansion create substantial long-term oppor - tunities. Success in this evolving landscape will require managers to balance traditional alternative invest - ment strengths with new demands for transparency, liquidity and accessibility. Those who navigate these requirements while maintaining investment discipline and performance focus are well-positioned to capture the significant opportunities ahead. The convergence of global trends with Australian market characteristics creates a unique environment where local managers can leverage their expertise while accessing expanded capital sources. As the industry continues to mature and evolve, the founda - tions established by Australian alternative fund man - agers position them well for continued growth and success in a competitive global marketplace.
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