Alternative funds in Australia: legal framework, trends and developments

This article was written by Andrew Stone and Dhanushka Jayawardena, Partners at Holding Redlich.

Australia has long been recognised as an attractive jurisdiction for alternative funds, with deep capital pools, a skilled financial services workforce and a stable legal and geopolitical environment. In the latest Chambers & Partners Alternative Funds guide, we share our insights into the key legal, regulatory and market developments shaping the sector.

Australia is among the top-ranking countries for median wealth per adult and offers a $4tn superannuation system, along with substantial capital sources accessible through wealth management and other product distribution channels. For investors, Australia provides a transparent legal system, stable governance and strong potential for sustained economic growth.

Australia’s alternative funds sector also benefits from established tax regimes, including those governing attribution managed investment trusts and managed investment trusts. These structures provide tax efficiency and concessional withholding tax rates for eligible foreign investors, making them particularly attractive for cross-border investment.

In the coming months, alternative fund managers can expect a number of important regulatory developments. The Australian Securities and Investments Commission is expected to release the outcomes of its consultation and review of Australia’s public and private markets. In addition, new anti-money laundering and counter-terrorism financing laws, due to commence in July 2026, will affect operational requirements for fund managers.

From a tax perspective, Australia implemented earnings-based thin capitalisation rules in July 2023, significantly reducing interest deductibility for leveraged transactions. The Australian Taxation Office also announced heightened scrutiny of managed investment trust restructures in March 2025, requiring stronger commercial rationale. Proposed foreign resident capital gains tax reforms targeting indirect land disposals were deferred until late 2025, but warrant continued monitoring, while state stamp duty variations continue to create transaction cost uncertainty for cross-border investments and fund structures.

Success in this evolving landscape will require fund managers to balance traditional alternative investment strengths with growing demands for transparency, liquidity and accessibility. Those able to navigate these requirements while maintaining investment discipline and performance focus will be best positioned to capitalise on the significant opportunities ahead.