European asset management industry to reach new record high by year-end, says EFAMA

Europe from space

The European asset management industry is back on track for another year of growth, according to industry body The European Fund and Asset Management Association (EFAMA) – with assets under management rebounding strongly after being hit by the coronavirus crisis in the first quarter of 2020.

In its yearly report, EFAMA estimates that total assets under management in Europe stood at EUR25.8 trillion at the end of 2019, a figure that fell by 11 per cent to EUR23 trillion by the end of the first quarter of 2020. A rebound of 8.3 per cent in the second quarter took assets back up to EUR24.9 trillion.

“Thanks to the positive news on the Covid-19 vaccine front, it is likely that the value of assets under management will reach another historical height by the end of 2020”, comments Bernard Delbecque, senior director for economics and research at EFAMA.

The amount of assets managed within Europe has more than doubled in a decade, starting from EUR10.8 trillion in 2008 and going up to EUR23.1 trillion by the end of 2018.

EFAMA’s report also looked at the asset management industry’s contribution to the real economy, and found that asset managers in Europe held an estimated 25 per cent of all debt securities and 30 per cent of listed shares issued by Eurozone residents at the end of 2018. 

Tanguy van de Werve, director general of EFAMA, notes the “key role played by the European asset management industry in managing long-term savings and allocating financial resources across industries on behalf of European citizens”, saying: 

“In the wake of the global pandemic, and with renewed European ambitions around sustainable finance and the development of the Capital Markets Union, our industry will continue to be a driving force for positive change, economic growth and financial security.” 

Elsewhere in the report, investment funds were found to manage the majority of assets in Europe. The UK still dominates this market, accounting for 27 per cent of the total assets, with France some way behind at 18 per cent, followed by Germany with 15 per cent, Switzerland with 9 per cent, and the Netherlands with 7 per cent.

Institutional investors’ discretionary mandates are even more concentrated, with 67 per cent of assets being managed in the UK and France. 

EFAMA also measured asset allocation, with bond assets accounting for 42 per cent of investment portfolios, compared to 28 per cent for equity assets and 6 per cent for money market and cash equivalents at the end of 2018. 

The share of bonds and cash has been gradually declining in recent years, in favour of alternative assets.