FRANCE – The foreign-owned share of the French fund market has increased from 5% to 15% since the mid-90s as groups are becoming more aware that they have to change from cross-border strategies to domestic strategies, says a report by FERI Fund Market Information.

Foreign fund groups that have “gone local” – that is to say where they have set up office in France offering domestic products, established links with domestic players or have acquired domestic fund companies – have raised total assets now worth 108 billion euros. Fund groups relying on cross-border strategies, however, only account for 2.9% of the market, worth 22 billion euros, says FERI.

Both foreign “locals” and foreign cross-border groups are expected to see their market share grow over the coming years, the report says. Foreign cross-border groups will see their share increase to between 33.3 billion euros and 43.6 billion euros over the next five years. But those who adapt their strategies to become ‘local’ will still increase in number.

Says Diana Mackay, joint managing director of FFMI, and editor of “Fund Market Access- France” comments: “The French mutual fund market has always been a difficult nut to crack for outsiders.

“Better tackled from within than without still remains the guiding maxim, but foreign groups are increasingly learning their way around the market complexities.”

Mackay believes that France offers good opportunities for cross-border groups willing to break into the domestic market, adding: “Lowest estimates predict fund market assets possibly 70% higher in five years’ time, meaning that there is a lot to go for. France could well be the next area of fruitful pickings for cross-border groups.”