Funds under management in Australia is expected to reach A$2.3 billion ($1.25 billion) by 2015 largely as a result of the continuous growth in contributions to the country's superannuation funds industry, according to a new government report.

Axiss, an advisory body set up by the government to promote Australia as a global financial services centre in Asia, forecasts average growth rates of between 10% and 20% a year for the country's managed investments market over the next 10 to 15 years. Even with a minimum growth rate of 10% a year, Axiss says total assets under management will grow from the present A$590 billion to A$2.3 billion in 15 years' time.

Already the host of around 100 domestic and foreign investment houses, the country is hopeful the strong growth in funds will entice more managers to set up shops there.

"With a sizeable pool of funds already available and with projections for further strong growth, it is hardly surprising that a number of global funds management firms are looking to establish operations in Australia. This can only benefit customers with competition increasing the volume and diversity of investment products on offer," says Les Hocking, chief executive of Axiss.

According to the report, investment managers are expecting significant growth in revenues, customers and profits over the next five years. Employment growth within the industry is also expected to be strong.

As at June last year, superannuation funds accounted for around 70% of the managed investments market, with a further 25% made up by unit trusts.

The report also shows life insurance offices are relying on superannuation business more than ever, with as much as 82% of their assets and 84% of premiums coming from that area. Of the top 10 life offices by assets, eight are domestically-owned.

AMP, with A$51 billion in funds under management, is the largest. It is followed by Lend Lease (A$21.2 billion), National Mutual/AXA (A$15.9 billion), Mercantile Mutual (A$13.9 billion) and Colonial (A$13.6 billion).

Life offices with less than A$10 in fund assets include Commonwealth Life (A$9.8 billion), Westpac Life (A$8.1 billion), Zurich Life (A$5.1 billion), National Australia Financial Management (A$4.5 billion) and ANZ Life (A$4.2 billion).