GLOBAL - The Italian asset management industry is set for a "wave of consolidation" that will see foreign players gain significant market share, according to a study by RBC Dexia.
More than 90% of respondents said they expected market consolidation to continue in the short term, while 70% believe the rationalisation of product offerings at large financial groups will cause further concentration.
The study - conducted with Ernst & Young Italy - cited the pursuit of economies of scale (94%) and the costs involved in implementing more stringent regulatory requirements (65%) as the main drivers of the trend.
Respondents singled out the Basell III capital requirements as a major driver of local banking groups offloading their asset management assets - particularly to foreign companies.
Almost all respondents (94%) said they thought foreign products would gain market share in the next few years.
In other news, BlackRock has launched the Frontiers Investment Trust, whose holdings will be drawn from 140 countries, including Argentina, Kenya, Kuwait, Nigeria, Oman, Qatar, Saudi Arabia, Tunisia and Vietnam.
BlackRock said GDP growth rates in frontier markets were among the highest in the world, as their economies were driven by "strong demographics and increasing consumer expenditure, aided by low debt burdens".
It also pointed out that these markets contain a significant amount of the world's reserves of oil and other hard and soft commodities.
The trust - which will provide an exit at NAV minus costs after five years - will carry annual management and administration fees of 1.1%.
It will also carry a performance fee of 10% of performance in excess of the MSCI Frontier Markets index, capped at 2.5% AUM.
BlackRock said it did not expect the annual expense ratio, excluding management fees, to come to more than 0.75%.
Placing for the trust will start on 29 November and close on 10 December. Dealing will begin 17 December.