Investments  

Half of managers have had no inflows for three years

Half of European managers had no fund inflows in the three years to end-July 2013, Fitch Ratings has revealed.

Analysis by the ratings business showed the top 10 European asset management firms received 50 per cent of inflows in bonds and mixed asset funds in the three years to end-July 2013, and 75 per cent of inflows into equity funds.

In a report seen by FTAdviser, Fitch Ratings says it expects the European asset management industry to continue growing in 2014, supported by improving investor confidence and a more solid macro-economic background.

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However, the agency warned growth will continue to be unevenly shared, with only a small number of firms taking the bulk of new cash from investors, as competition remains intense and market conditions as well as investor demand continue to change.

Total assets under management in the European asset management industry reached almost €16,000bn in June 2013, the report revealed, which was mainly driven by market performance in the past 12 months.

But the report, , entitled European Asset Management, Tapping Growth Through Rationalisation, Innovation, Diversification, shows investors are also returning to the industry with net inflows of €110bn (£91bn) in 2013 so far and €186bn (£155bn) in 2012.

Fitch studied the financial statements of 24 major European asset managers, with combined AUM of almost €8,000bn (£6,670bn), to produce the report.

On average, Fitch’s study found that independent asset managers are more profitable than subsidiaries of banks or insurance companies, benefiting from higher margin on AUM and lower cost/income ratios.

A number of subsidiaries may be looking to improve their cost structures with rationalisation and restructuring, to bring cost/income ratios in line with the 65 basis points median 2012 level observed at independent managers in Fitch’s sample.