UK investors are Europe’s biggest users of collective investment funds, with British asset managers holding the equivalent of more than twice the country’s GDP in assets under management at the end of 2007, a report from Europe’s investment management industry association shows.
This compares with assets held by investment management firms of only about 12% of GDP in Greece and 50% in Italy, and a Europewide average of 102%, according to the report, which was unveiled in Brussels today by the European Fund and Asset Management Association (EFAMA).
Although based mainly on 2007 data, EFAMA’s second Annual Asset Management Report includes some figures from the end of last year, which show the value of assets professionally managed in Europe fell 21% in the 12 months to the end of December, to around €10.7trn, due to the global financial crisis.
Growth potential
EFAMA director general Peter De Proft said among the findings of the research was the “quite significant” growth potential for assets under management in the European funds industry, due to such factors as the growing need for many Europeans to contribute more to their own retirement.
Bernard Delbecque, EFAMA director of economics and research, added that he did not foresee Europe’s real economy would develop as strongly again as in the past “without the contribution and support of the asset management industry”.
“The contribution of asset managers to the management of the savings and the financing of the economy is an essential driver of growth,” he added.
Among the report’s other findings:
• Of the €2.9trn decline in AUM in the year to the end of December, about 75% was due to the fall in the value of the assets under management and the remaining 25% to redemptions.
• Insurance companies represent the largest institutional client category for asset managers, accounting for 42% of total institutional AUM, followed by pension funds.
• The UK has the largest slice of the European asset management industry’s pie, based on end-of-2007 data. It has a 34% share, compared with France’s 21%, Germany’s 11% and Italy’s 6%.
• Though known for their funds industries, Luxembourg and Ireland do not appear high in the AUM rankings because they look after funds rather than managing their assets.
• Investment funds represented 51% of assets managed in Europe at the end of 2007, while discretionary mandates accounted for the remaining 49%.
• Bonds and equities are the asset classes most favoured by European investors, accounting for 40% and 37% of total AUM, respectively, at the end of 2007.
• EFAMA’s research, which was based on a combination of responses to a questionnaire sent to its member associations and other internal and external data, also found that direct employment in Europe’s asset management industry was about 70,000 at the end of 2007. The figure does not include those in external businesses, such as marketing, nor does it reveal the extent of job losses that have occurred in the sector since the end of 2007.
The report is available to read and download at EFAMA’s website, www.efama.org.
