Australia’s pool of investment funds is rising rapidly and miners need to dive in
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Australia’s superannuation system is paying dividends in the form of a growing pool of funds that are searching for a home — which is good news for our miners.
The current pool of funds is set to more than triple by 2035, says Eddie Grieve, ASX head of listings and issuer services.
“A major factor in Australia’s favour is the availability of funds and this of course is due to the large pool of investable funds resulting from the superannuation system,” he told delegates on the first day of the Latin America Down Under conference in Perth.
“We are actually currently the largest pool of investable funds in Asia. We’re about sixth in the world and that is growing rapidly.
“Currently we’re at about $US2.6 trillion in funds under management and that’s going to grow to about $US9.4 trillion by 2035.
“That money needs to find a home and in fact the relative investment opportunities are shrinking.”
Mr Grieve told the gathering of Australian mining companies and investors the funds were a “major opportunity”.
Australia implemented compulsory superannuation in 1992 and that has seen a drastic increase in investable funds.
So far already in 2018 the number of mining IPOs on the ASX has jumped from five companies raising less than $5 million in 2015 (the bottom of the downturn) to 31 companies raising almost $300 million.
The ASX currently has 592 mining companies listed with a combined market cap of $439.5 billion.
It has been the leading main board exchange for mining capital raising from 2010 to 2018.
Mr Grieve says the ASX is also becoming increasingly attractive to international issuers, which rose to over 45 in 2016 from its lowest point of less than five in 2002.