Teneo Partners (Australia) Pty Limited

The Australian market

Australia is a rapidly expanding market for alternative providers with institutional investors investing in excess of USD25bn into alternatives as of September 2006. Australia has the 4th largest mutual funds industry in the world and after Japan we estimate the institutional appetite for alternatives is the 2nd largest in Asia. The tremendous growth in assets is due in part to compulsory superannuation or pension policies introduced by the Australian government in the early 1990’s which forced both employers and employees to contribute a high percentage of salary to individuals pension plans.

Primary investors are corporate pension funds known locally as Super funds. Whilst these investors have initially often taken the first step into alternatives through fund of funds they are beginning to invest in single funds. Domestically super funds have long invested in one alternative asset class - real estate with domestic private equity investing began in earnest in the late 1990’s and more recently an increase in investments in offshore private equity vehicles. The 2005 Russell Survey on Alternative Investing, published in September 2005, shows average Australian allocations to hedge funds of 6 per cent, private equity of 5 per cent and real estate of 10 per cent.

Retail investors have mainly invested in alternatives through structured products often including capital or principal protected notes. A few locally based hedged funds have successfully tapped the local market through platforms and wrap accounts which can accept very small amounts per investment and offer regular liquidity. This is however unlikely to satisfy offshore alternative managers who require large minimum investments and offer limited liquidity.

Teneo Partners (Australia) Pty Limited (ABN 73 113 172 893) is an Authorised Corporate Representative (No. 286791) operating under Australian Financial Services license No. 241175.

Teneo Partners (Australia) Pty Limited is authorized to

• Provide financial product advice
• Deal in a Financial Product
• Issue, apply for, acquire, vary or dispose a financial product
• Apply for, acquire, vary or dispose of financial products on behalf of another

Australian Securities & Investment Commission website: http://www.asic.gov.au/asic/asic.nsf

Contact

Mark Voumard

Director: Teneo Partners Australia (Pty) Limited

Email: voumard@teneopartners.com

Mailing Address

Teneo Partners Australia (Pty) Limited

Authorised Corporate Representative (No. 286791)

C/O Lowell Capital Limited (Licence No. 241175) Level 14 31 Queen Street Melbourne Victoria 3000 Australia