Fund of funds to overtake MoM market by 2007
EUROPE – The retail funds-of-funds market will overtake the manager-of-manager business in Europe by 2007, taking 67% of market share as opposed to 47% in 2001, says research firm, Cerulli Associates, though the manager-of-manager business will see concentrated growth in the UK among institutional investors.
The growth in the retail funds-of-funds business will come mainly from France and Germany where it already eclipses the institutional manager-of-manager market.
Cerulli suggests the main reason for this growth is because investors in France and Germany do not differentiate between funds-of-funds and manager-of-manager products.
According to Cerulli, funds-of-funds are quicker to establish or modify. This attracts retail investors since they are less concerned with investment processes and rely less on customised investment solutions than institutionals, says the research firm.
The continued growth of the manager-of-manager business in the UK will come from smaller pension funds, which, without the resources to manage their assets inhouse, are increasingly turning to asset management firms that offer multi-manager structures, says Cerulli.