The review provides a snapshot of the industry, looking at its overall size, general structure, asset allocation and client base. It also reveals that the UK, France and Germany together accounted for 66% of total assets under management in Europe at the end of 2008.
The review provides a snapshot of the industry, looking at its overall size, general structure, asset allocation and client base. It also reveals that the UK, France and Germany together accounted for 66% of total assets under management in Europe at the end of 2008.
Key Finding:
• Asset management is a vital source of economic growth. It provides a link between investors seeking appropriate savings vehicles and the financing needs of the real economy. The asset management industry also provides important employment opportunities across Europe, both in core asset management and related services.
• The global asset management industry was severely hit by the worldwide financial crisis in 2008, with all regions suffering a severe contraction in assets. In Europe, the value of assets professionally managed in Europe suffered a fall of 21%, from EUR 13.6 trillion at end 2007 to EUR 10.8 trillion at end 2008. Thanks to the stock market rally and the recovery of net inflows into UCITS, the value of AuM bounced back in 2009 to an estimated EUR 12.8 trillion at end 2009. In relation to GDP, total AuM in Europe is estimated to have reached 100% at end 2009 from 80% at end 2008.
• Investment funds represented EUR 5,328 billion or 49.5% of AuM at end 2008, whereas discretionary mandates accounted for the remaining EUR 5,388 billion. Typically, asset managers receive mandates from institutional investors and high-net-worth individuals, whereas investment funds serve the retail and institutional markets.
• Asset management is concentrated in a limited number of countries. Reflecting the size of the domestic savings market, the degree of development of the local financial services sector and the role played by institutional investors, the UK, France and Germany together accounted for 66% of total assets under management in Europe at the end of 2008. Italy and Belgium followed in this ranking.
• More than 2,500 asset management companies are registered in Europe. France, Luxembourg and Ireland are home for the highest number of companies. The high figure for France reflects the importance of the asset management industry and the large number of independent and specialized asset managers. The high number of companies operating in Luxembourg and Ireland reflects the role played by these countries as leading centers for administration and global distribution of UCITS as well as the legal obligation for fund houses to have a management company in each country where they have fund domiciles.
• Institutional investors represent the largest client category of the European asset management industry, accounting for 66% of total AuM in Europe. They dominate the asset management landscape in the UK, France, Germany, Portugal, Hungary and the Netherlands, reflecting the ability of these countries to attract institutional mandates from insurance companies and pension funds. These two types of institutional investors accounted for 45% and 27% of total AuM for institutional clients at end 2008, respectively.
• The dominant asset classes managed in Europe were bond and equity, with 46% and 27% of total AuM at end 2008, respectively. Whereas mandates and investment funds had similar equity exposure (27% and 29%, respectively), mandates had a significantly higher exposure to bond than investment funds (54% compared to 34%), reflecting insurance companies and pension funds’ asset allocation strategies.
© EFAMA - European Fund and Asset Management Association
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