Funds to drive asset growth of 8% in Europe
EUROPE - Europe’s investment funds are driving growth in a shrinking global fund management industry, says Cerulli Associates, a London and Boston-based research and consulting firm.
In its semi-annual report based on assessments of retail and institutional fund management marketplaces covering 16 countries, Cerulli estimates worldwide assets under management at the end of June 2002 to have fallen to $38.2trn from $39.3trn at the end of 2000, blaming a decrease in growth in the US.
Cerulli claims collective scheme assets in Europe to have grown 10% compounded annually since year-end 1997, compared with a US expansion of 5%, and expects European investment funds to reach $6.2trn in size by 2006.
According to Cerrulli, Europe’s investment fund industry currently stands at $3.5trn and will expand at a compound annual growth rate (CAGR) of about 14% per annum between years-end 2002 and 2006. The US CAGR is expected to expand only 9%.
Included among the reasons given for greater growth in Europe are: a growing equity culture in Europe, the privatisation of pensions and tax efficiency, which remains concentrated in the fund structure in Europe.
Counterbalanced by weak growth in institutional mandates from occupational retirement schemes, Cerrulli puts the growth rate for the overall asset management marketplace in Europe at 8% for the period 2002 to 2006. These figures are in line with expectations from consultant Oliver, Wyman and Company and UBS Warburg which estimate Europe’s annual growth in asset management for the same period to be 7.4%.
The US asset management market is expected to see growth of 8%, says Cerulli.