Europe’s asset management industry has shrugged off the slump of 2008 to record a new all-time high in assets under its management at the end of 2010. Playing the key role was robust performance from equity and bonds with new inflows accounting for just more than a third of the industry’s solid showing.
Putting the dark days of the global economic crisis behind it, Europe’s asset management industry has bounced back to record a new-high in total assets under management (AuM) in 2010. This is revealed in the European Fund and Asset Management Association’s (EFAMA) just-released annual review of asset management in Europe.
Although it is still a preliminary estimate, EFAMA put total AuM by more than 3,100 asset management companies registered in Europe at the end of 2010 at €13.8trn ($19.3trn). This was €1.4trn (11.3%) above the €12.4trn recorded at the end of 2009 and €2.9trn (26.6%) above the €10.9trn seen at the end of 2008.
The estimated 2010 year-end total is €200m (1.5%) higher than the all-time high total of €13.6trn reached at the end of 2007. As a% of Europe’s GDP, year-end 2006 total AuM remains a record at 106% of GDP. Total AuM stood at 103% of GDP at the end of 2010 having reached a low of 81% of GDP in 2008.
EFAMA estimates that in 2010 market appreciation was responsible for 65% of the increase in AuM while inflows added the remaining 35%. EFAMA noted that investors’ increasing risk appetite at the beginning of 2010 saw increased interest in higher yielding assets and resulted in a strong rise in the net sales of long-term UCITS (undertakings for collective investment in transferable securities) excluding money market funds to €292bn from €195bn in 2009.
Special funds reserved to institutional investors, added EFAMA, also benefited in 2010 receiving a record €149bn inflow, €100bn more than in 2009. In parallel, very low short-term interest rates and competition from bank deposits led to some investors shifting assets away from money market funds.
EFAMA said equity funds experienced the strongest asset increase in 2010 (19%), followed by bond funds (17%), balanced funds (16%) and money market funds (16%).
EFAMA noted: “Applying these growth rates to the asset mix observed in the investment fund assets managed in Europe, those assets can be estimated to have increased to €6.9trn in 2010.”
EFAMA noted asset management in Europe remains dominated by managers in four countries – the UK, France, Germany and Italy – accounting for a combined €8.717trn (70.5%) of total AuM at end of 2009.
The UK’s asset management industry was well ahead with its 179 participants (186 in 2010) having total AuM of €3.783trn at the end of 2009 to give it a market share of 30.6%. France’s 567 asset management companies (600 in 2010) ended 2009 with total AuM of €2.816trn to give it a market share of 22.8%, while Germany’s 301 asset management companies (304 in 2010) had total AuM of €1.46trn to give it an 11.8% market share.
In fourth position, Italy’s 315 asset management companies (305 in 2010) had total AuM of €658bn at the end of 2009, giving it a market share of 5.3%.
Although in third position, Germany is home to the world’s largest asset manager outside the US, Allianz. According to consultancy Towers Watson, the German insurer had AuM of $1.859trn at the end of 2009, ranking it behind US asset mangers BlackRock ($3.346trn) and State Street Global ($1.911trn).
Among insurers, Axa’s total AuM of $1.453trn ranked it sixth in the world. It was followed by bancassurer BNP Paribas, with total AuM of $1.327trn.
Next in line among European insurers was Generali which with total AuM of $609.32bn came in 21st position. The Italian insurer was followed in 22nd position by UK insurer Aviva which had total AuM of $571.67bn.
In total, 18 insurers/bancassurers were listed among the world’s top 50 asset management companies in Towers Watson’s ranking. Of the insurers, 10 were European.