Total Assets under Management (AuM) in Europe are estimated at EUR23.1 trillion, an increase of 113 per cent since end-2008, according to the 11th edition of the European Fund and Asset Management Association’s (EFAMA) Asset Management Report.
The report, which aims to highlight the fundamental role of asset managers in the financial system and wider economy, channelling savings of European citizens towards investments and putting these savings to work productively for the economy, reveals that investment funds assets represent EUR12.5 trillion – 54 per cent of total AuM – with discretionary mandates accounting for the remaining EUR 10.6 trillion. Although down from 2017 due to the sharp decline in global stock markets towards the end of 2018, total assets have more than doubled from the lows they reached during the global financial crisis of 2008.
Since 2011, the share of investment funds in total AuM has risen every year. This has occurred largely as a result of the much higher proportion of equities in the portfolio allocation of investment funds (42 per cent of total investment funds AuM) than in mandates (22 per cent of discretionary mandates AuM) - coupled with the strong rise of stock markets over the 2012-2017 period. The increase in the share of investment funds in the portfolio allocation of pension funds and insurance companies has also played a role in this evolution.
Three countries hold a significant market share in assets under management in Europe: the UK (37 per cent), France (17 per cent) and Germany (9 per cent). These high market shares reflect the size of these countries’ economies, their experience in financial services as well as their pool of savings accumulated over the years.
In most European countries, the asset management industry serves predominantly domestic clients. The UK is the main exception with 40 per cent of AuM managed on behalf of foreign clients.
Tanguy van de Werve (pictured), Director General of EFAMA, says: “This latest edition of EFAMA’s Asset Management Report highlights the important role played by the European asset management industry in managing investments on behalf of European citizens and institutional investors. The observed continuing increase in the share of investment fund assets in the total assets managed in Europe confirms the success of UCITS as a global brand and the quality of the regulatory framework for the management of alternative investment funds (AIFs).
“The overall ecosystem created to support the operations of UCITS and AIFs on a cross-border basis, including the well-functioning model of delegation and the flexibility offered to outsource back-office functions, has allowed to benefit from the best expertise available and played an essential part in the global acceptance of UCITS and AIFs. Ensuring the continued success of these investment vehicles should be a strategic goal for the new European Commission, and an integral part of the plan to create a well-functioning Capital Markets Union.”
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