European Fund Managers Gain Share
Seven of the top ten fund distributors in Europe this year are based in the region, compared with just three in 2013.
Detlef Glow, head of research for Europe, Middle East and Africa, at fund researcher Lipper, told Markets Media: “One big reason might be the move in the direction of multi-asset funds which is dominated by local players in Europe.”
The European investment industry had net inflows of €256.8bn into long-term investment funds for the year to the end of September according to Lipper. In that month mixed-asset products returned as the best-selling asset type in Europe after suffering outflows in August.
In 2013 seven of the top ten fund promoters in Europe were American according to Lipper. BlackRock was top, followed by JP Morgan Asset Management and then Franklin Templeton Group in third place. Two UK asset managers – Prudential plc and Standard Life Group – were fourth and fifth respectively. Italy’s Intesa Sanpaolo was seventh.
BlackRock remains the top fund distributor in Europe this year but there are only two other US fund managers in the top ten – Vanguard in ninth and JP Morgan at tenth.
The remaining six largest fund distributors are European. In second place was Amundi from France, followed by Germany’s Deutsche Bank. Switzerland’s UBS was in fourth place, followed by fifth-placed Eurizon Capital, the asset management arm of Intesa Sanpaolo. Other European asset managers in the top ten are Pioneer Investments, the asset management arm of Italy’s Unicredit, Nordea, the Nordic financial group, and Standard Life.
“Apart from BlackRock, the favourites are always changing,” said Glow. “It shows the importance of having the right product as market conditions change.”
Glow added there has also been restructuring in the European fund industry in the past few years.
For example, Amundi was created from the merger of the asset management operations of French banks Credit Agricole and Societe Generale in 2010. Amundi had assets under management of €952bn at 30 September 2015 which it said makes it the largest fund manager in Europe according to the firm.
Last week on November 12 Amundi raised €1.5bn in an initial public offering on Euronext giving it a market capitalization of €7.5bn. It was the largest IPO by an asset management company in Europe this year and the Paris Stock Exchange’s largest listing since 2005.
European fund managers have been boosted by gaining share in exchange-traded funds. Nearly half of Deutsche Banks net inflows this year – €8.6bn – were from ETFs and the same applies to UBS with ETF flows of €6.4bn according to Glow.
Assets under management in the European ETF industry increased from €427.97bn to €464.15bn during October according to Lipper, driven mainly by the performance of the underlying markets.
The European ETF industry is highly concentrated as just 19 groups accounted for €340bn or 73.26% of the overall assets under management. The largest ETF promoter in Europe, Blackrock’s iShares, accounted for 49.45% of the overall assets under management with €229.5bn. The number-two promoter, Deutsche’s db x-trackers had €55.9bn and third-laced Lyxor, an arm of Societe Generale, had €47.6 bn.
New regulations, MiFID II, will affect the fund distribution landscape in Europe. Glow said he expects digitalization to be one of the main drivers of change with new entrants in the market, including robo-advisors.
After attending the International Transfer Agency Summit in Ireland, Glow said in a report last month that the industry may have missed opportunities to take advantage of automation such as client communication and the settlement of transactions.
He wrote: “In this regard, Dominic Hobson – founder of COO Connect – said during his presentation that the fund industry seems to have a death wish: the infrastructure used is not state of the art and the industry is coping with these circumstances like a frog sitting on a hot skillet. He said the asset management industry needs to change its attitude to infrastructure, since it is seen as a tool that helps to fulfill requirements rather than as a tool that opens opportunities.”
Featured image by Romolo Tavani/Dollar Photo Club
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