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New temporary FIRB rules hurt managed funds ability to support the economic recovery

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New temporary FIRB rules hurt managed funds ability to support the economic recovery

New temporary FIRB rules hurt managed funds ability to support the economic recovery

Temporary changes to the foreign investment review framework have created unintended consequences for funds managers that could create additional headwinds for struggling businesses at a time when equity and debt funding is desperately needed to drive the Australian economy.

Executive Chairman of Atlas Advisors Australia, Guy Hedley said the Australian Government’s recent reform, requiring all foreign investment be scrutinized by the Foreign Investment Review Board, has unintentionally captured some managed funds and could reduce interest in Australia as an investment destination at a time when the nation has a desperate need for capital.

“The reforms importantly aim to safeguard the national interest against opportunism amidst the COVID-19 crisis,” Mr Hedley said.

“However, it also creates needless complications for managed funds that invest broadly across different industries and sectors on behalf investors in areas that require capital support.

“In today’s fast-moving business environment, where innovation is key to survival, enterprise cannot wait unreasonably long periods of time for the delivery of outcomes.”

Mr Hedley said that by unintentionally adding some categories of managed funds to the non-FIRB exemption rules could have the effect of stymieing business opportunities that are critical to drive economic growth both now and in the future.

“These measures will leave thousands of Australian startups, emerging, listed and private companies stranded without critical funds needed to drive business continuity and change,” he said.

“Many of these companies will inevitably collapse, forgoing billions of dollars’ worth of tax and employment generating business opportunities.”

About Atlas Advisors Australia

Atlas Advisors Australia is a leading funds manager and investment advisory business, operating between China and Australia offering a wide range of financial services and wealth management solutions. With operations in Sydney and Melbourne in Australia and Shanghai in China, we are able to support investors in all China and Australia locations.

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