Financial Services
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Australia’s financial services sector is resilient and booming.
The strength of the nation’s markets during the Global Financial Crisis was highlighted by the World Economic Forum, which in 2009 ranked Australia as the world’s second-best financial centre after the UK. Australia was the only country in the top 20 to improve its ranking.
With around A$1.7 trillion in assets under management, Australia is the largest funds management market in Asia, and the fourth-largest in the world. Australia has one of the highest levels of managed funds per capita in the world, with total investment fund assets in Australia projected to reach A$7 trillion by 2028.
The future is looking good for this sector, with projections of 11% growth annually to 2025.
Victoria offers expertise in pension funds management and global financial services, as well as financial services research, education and training.
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Financial services cluster
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Melbourne is home to a critical mass of financial services firms. More than 1000 financial service operations are based here, as well as 40 banks, 60 funds management firms and 25 major superannuation funds.
The $33 billion financial and insurances sector represented more than 11% of Victoria’s Gross State Product in 2008-09.
Two of Australia’s largest banks - which also happen to be two of the world’s safest – are headquartered in Melbourne: National Australia Bank (NAB) and the Australia and New Zealand Banking Group (ANZ).
International investment firms present in Melbourne include Franklin Templeton, Credit Suisse, Goldman Sachs JB Were, Morgan Stanley, UBS, Martin Currie and Vanguard Investments.
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Skilled workforce
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Melbourne is home to a large pool of highly qualified and experienced finance industry professionals. The financial services sector accounts for more than 100,000 direct jobs.
In Melbourne alone, approximately 20,000 people work in the funds management industry cluster. Over 230 languages and dialects are spoken in Victoria, providing your business with the opportunity to recruit talented, multilingual staff in a native English-speaking location.
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Research and education
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Melbourne is an international centre for financial services education and research. It is home to the Australian Centre for Financial Studies and the Melbourne APEC Finance Centre.
Victoria has more graduates in management, commerce and ICT then any other Australian state, more than 30,000 in 2008.
In its 2009 worldwide rankings, The Economist Intelligence Unit ranks the Melbourne Business School MBA at number 17, and Monash University at number 59.
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Competitive infrastructure
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Melbourne offers advanced business infrastructure at costs below major regional competitors.
The city has the most affordable office space in Australia, according to a 2010 report by global property consultants Cushman and Wakefield – priced well below Sydney and Brisbane.
Melbourne is ranked 53rd on the list of the world’s most expensive cities – proving more cost effective than Sydney (23rd), Brisbane (29th) and Perth (32nd).
It’s an attractive, easy environment for expatriates to settle into quickly and feel at home.
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Funds management: Low-cost and prudent
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The Melbourne Mercer Global Pension Index, which compares private and public retirement income systems around the world, has ranked Australia’s system at number two in the world behind the Netherlands.
Victoria accounts for around one-third of the growing Australian funds management market.
The Global Financial Crisis reinforced the importance of Victoria’s low-cost, prudent approach to funds management, and our well regulated financial culture.
Victoria’s sophisticated funds management sector is underpinned by a federally mandated retirement savings scheme. Six out of Australia’s largest industry pension funds are based in Melbourne.
Melbourne is home to the Victorian Funds Management Corporation and Australia’s sovereign fund, the Federal Government’s Future Fund.
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Venture capital
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Victoria is Australia’s leading early-stage venture capital location. Successful funds include Starfish Ventures, GBS Ventures, the Medical Research Commercialisation Fund and the Trans Tasman Commercialisation Fund.
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Islamic banking
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Victoria is fast becoming a hub for Islamic Finance in Australia, and the Asia-Pacific. In 2004, Victoria was the first state in Australia to recognise special arrangements to ensure compatibility with Shari’a law. Reforms included:
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- Allowing avoidance of forbidden terms, such as interest
- Removal of double stamp duty charges on property purchases
- Recognising the principle of profit sharing
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Recognition of this was evident with the 2010 Victorian Innovation in Funds Management Award presented to Melbourne boutique fund manager Intrinsic Investment Management, for its Intrinsic Crescent Ethical Managed Discretionary Account product.
La Trobe University and Monash University (through its campus in Malaysia at Sunway) are developing courses that focus specifically on Islamic banking and finance. Melbourne is also home to the National Centre for Islamic Studies.
A number of institutions have been established to cater for the growing demand for Islamic finance products.
The Muslim Community Cooperative Australia (MCCA Group) is an Australian leader in Islamic mortgages.
Other Melbourne-based institutions, including major banks, offer Islamic finance products. The ANZ Bank, which has its global headquarters in Melbourne, has a strong presence in the Middle East, and National Australia Bank is introducing products to comply with Shari’a law.
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