Pension fund money makes up smaller slice of asset managers’ AUM

The volume of money managed by Europe’s asset managers is on course to hit €29trn by the end of this year, though pension funds and have been making up a smaller proportion of the total, according to new figures.

Publishing the latest edition of its Asset Management Report into recent trends in the industry, the European Fund and Asset Management Association (EFAMA) said assets under management (AUM) by the sector in Europe shrank by 13.8% in 2022 to €27.8trn – mainly because of the downturn in bond and stock markets that year, but were expected to increase to €29trn in 2023 “thanks to the stronger capital markets environment”.

Nearly 85% of the asset management activity takes place in six countries, it said in the report release yesterday – the UK, France, Switzerland, Germany, the Netherlands and Italy.

Pension funds made up a smaller portion of client capital under the wing of asset managers in Europe in 2022, with the proportion falling to 24.3% from 25.9% in 2021, EFAMA said.

Institutional clients as a whole made up 70% of the capital managed by asset managers, which was two percentage points lower than the year before.

The assets of retail clients, on the other hand, grew to 30% – two percentage points higher than in 2021.

“Despite ongoing volatility in the stock markets and a slowdown in inflation, European retail investors appear to continue investing net new money into funds in 2023,” the organisation said.


Explaining the pension fund trend, the industry association said the share of pension funds in total AUM had peaked in 2018, “mainly due to the robust expansion of the sector in the UK because of the introduction of an automatic pension enrolment scheme in 2012”.

“Subsequently, as this programme matured, the share of pension funds in total AUM gradually declined, falling to 24.3% in 2022,” EFAMA said.

“This was mainly due to the significant decline in the valuations of bonds managed on behalf of UK pension funds,” it said.

However in the UK, pension funds remained the largest individual client group for asset managers in terms of AUM, according to the report, although their share was revealed to have declined from 40% in 2021 to 34% in 2022.

Commenting on the task ahead for European asset managers, Bernard Delbecque, senior director at EFAMA, said: “To remain competitive, asset managers need to adapt their business model to benefit from AI, turn key sustainability challenges into opportunities, and deliver private market products to retail investors.”

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