McKinsey: Western European AUM languishing behind other regions
EUROPE - Asset management growth in Western Europe has trailed that of Asia and Central and Eastern Europe, according to a survey by McKinsey & Company.
While the latter two regions each saw assets under management (AUM) increase by 21% year-on-year in 2009, Western Europe lagged far behind, with only 12% growth.
However, the global asset management industry as a whole almost recovered to pre-2007 levels last year, with €29trn in AUM.
Overall, assets invested worldwide reached €50trn, which showed institutional investors were increasingly looking after asset management internally, according to McKinsey's Global Asset Management survey.
A total of €21trn of assets were managed internally.
However, asset managers still saw global AUM growth of 14% to €29trn, bringing it close to 2007's level of €32trn.
Despite this, Pierre-Ignace Bernard, head of European asset management practice at McKinsey, said profitability had yet to reach 2007 levels.
"While AUM levels are recovering steadily, profitability will remain significantly below 2007 levels, driven by more defensive product mix, lower prices and pressure from distributors that demand a higher share of the pie in providing shelf space," he said.
In Western Europe, institutional markets were healthiest in the Scandinavian countries, with 5% net growth, slightly behind Germany, which witnessed net growth of 6%.
Across Europe, asset managers in almost all countries saw net inflows, the exceptions being France and three of the five PIIGS states - Spain, Portugal and Italy.
The survey predicted revenues and profits in the Western Europe would rise this year to their highest levels since 2007.
Marin Huber, director at McKinsey, said asset management still offered opportunities for investors who "dared".
"Too little attention is put on the massive opportunities emerging, such as the increased need for liquidity management and ALM under Solvency II," he added.