Tuesday, July 31, 2007
“Because of the contagion from subprime, all of the credit sectors are re-pricing,” Sydney-based Entwistle said. “There are lots of sellers and no buyers, the market has to settle down before we can get some clarity.”
``More of a concern is what will happen once the fallout moves from the subprime sector to more senior debt, when many more managers have exposure.''
The nation's 20 million people are the world's biggest investors per capita and Australia has the fourth-largest managed funds industry. Unlike in the U.S., where only qualified investors can place money in hedge funds, Australia allows individuals to invest in the vehicles. Australian hedge fund managers directly controlled A$41 billion in assets as of July last year, the most in Asia, according to AsiaHedge. Assets almost tripled in the two years to June 2006 as money from compulsory pension savings, tax breaks, a new state-owned investment fund and takeovers boosted fund inflows, according to government data.