hich global marketplace has had the strongest cumulative asset growth of any major fund marketplace in the world? Which country's funds management pool is now the fifth largest in the world? If Australia didn't come right to mind, it soon might. Without much fanfare, the Land Down Under is rapidly emerging as a leading global investment center — and the leading investment center in the Asia-Pacific region. With mutual fund assets of about US$340 billion, Australia has surpassed Japan, and even the United Kingdom, as a funds management center.
        International firms looking to take advantage of Australia's growing demand for asset management expertise are flocking to the country and establishing significant operations, according to Axiss Australia, a financial industry investment-promotion agency established by the Australian government in 1999. Among the investment companies announcing new operations recently are Deutsche Bank, ING, State Street Global Advisors, Vanguard and Mellon Financial Corp.

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A key draw for these and other global money managers is Australia's compulsory superannuation — or pension — scheme established in 1992, requiring employers to contribute nine percent of employees' wages into a retirement savings fund. Among the recently announced financial services projects in Australia, as reported by Axiss Australia, are these:
        • The founding of Mellon Global Investments Australia Ltd., a funds management subsidiary of Mellon Financial Corp., in Sydney. "Mellon already manages over A$1 billion [US$605 million] for Australia institutional clients, and we expect this move to bring further expansion of our business," says Jon Little, CEO of London-based Mellon Global Investments Ltd.
        • A likely data-center headquarters in Sydney for Zurich, the global financial services company (a final decision was pending at press time, but the company's general manager for investment and life business, Peter Delprado, says Sydney is an ideal location from a cost perspective relative to Hong Kong and Tokyo).
        • The need for additional providers of clearing and other financial services is attracting new investment. Berndale Securities, a subsidiary of Merrill Lynch, is increasing its stake in the local correspondent clearing business in Australia, which will add jobs to Australia's securities servicing industry.
        "Today's emerging financial centers are concerned less with the physical locality of markets and more with the supply and skill sets of the people driving financial transactions," notes Les Hosking, CEO of Axiss Australia and the former CEO of the Sydney Futures Exchange. "In short, financial centers are knowledge-based rather than transaction-based centers. Tomorrow's financial center will offer access to a work force that is both innovative and has first-rate financial skills."