ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

Europe: a growing cash cow for asset managers

Europe’s share of the world economy may be declining steadily, but there is at least one area where the continent is growing in importance: asset management revenues. Global asset management companies are deriving an ever growing share of their revenue from Europe, at the expense of the United States.

According to data from Cerulli, an asset management consultancy, Europe was the source of a third of the global fund industry’s net revenues in 2015, up from a quarter in 2011.

Revenues from all other continents, even Asia, decreased as a share of the total. The US saw the biggest drop, though revenues from there still account for over half of the global total.

Cerulli expects the importance of the US as a source of asset manager revenues to decline further over the next couple of years, with its share of total revenue falling to 48% by 2020. Europe is expected to continue its growth, while Asia and Latin America are also expected to be bigger revenue raisers.

Asset growth is key

Cerulli didn’t give an explanation for the stellar revenue growth in Europe, but the most important determinant of asset management revenues is AuM. According to the European asset management association Efama, total AuM in Europe increased by 40% between 2011 and 2015 to €19trn. Worldwide, AuM increased at a much slower pace.

Another factor that could explain the steady decline in importance of the US when it comes to revenue could be the rise of passive investments, which are much less of a revenue raiser than actively managed funds. The fact that passive investing is more established and has a larger market share in the US than elsewhere helps explain why the share of the US in global asset manager revenues is on a downward path.

 

MORE ARTICLES ON

  • Can M&A and buybacks breathe life into UK market?

    Can M&A and buybacks breathe life into UK market?

    Both buybacks and M&A should help realise value in UK shares, boosting prices and giving investors another reason to consider the UK stockmarket Not only does M&A activity appear to be picking up, with a high-profile bid for UK electronics retailer Currys, but the scale of company buybacks continues to accelerate. If it goes well,…

  • Capital Group launches multi-thematic Article 8 funds

    Capital Group launches multi-thematic Article 8 funds

    Capital Group has launched a set of multi-thematic sustainable funds that are available for investors in Europe, writes Christian Mayes. The Capital Group Sustainable Global Opportunities fund (LUX) will invest in global equities, while the Capital Group Sustainable Global Corporate Bond fund (LUX) will target fixed income exposure. The launch also includes a multi-asset offering…

  • Bond funds pull in €29.7bn in January – LSEG

    Bond funds pull in €29.7bn in January – LSEG

    Bond products were the best-selling asset class in January, according to LSEG Lipper’s European Fund Flow report, writes Christian Mayes. The asset class pulled in a net €29.7bn in the month, while Money Market USD grouping was the best-selling Lipper Classification after receiving €11.2bn inflows. Providers of mutual funds pulled in €22.5bn, while passives saw net…

  • Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    A quarter of all Article 8 funds could be accused of greenwashing based on their sustainability framework and practices, according to MainStreet Partners, writes Christian Mayes The 24% of funds classified as a greenwashing risk by the 2024 ESG Barometer report marks a four percentage point increase from the 20% flagged at the end of…

  • EU green rules could stymie decarbonisation projects – ExxonMobil

    EU green rules could stymie decarbonisation projects – ExxonMobil

    The European Union’s climate regulations may lead to it halting its investments in Europe, ExxonMobil has warned. Speaking to the Financial Times, Karen McKee, president of the product solutions division, said the oil and gas giant had struggled to begin decarbonisation projects in Europe due to the regulatory burden. The result, she added, was that…

  • ICE flags need for Europe to double green investment

    ICE flags need for Europe to double green investment

    Investments to modernise energy and transport must double by the end of the decade to reach 2030 climate targets, the EU has been warned. According to the Institute for Climate Economics (ICE), which has released the European Climate Investment Deficit report, the bloc lacks what it calls a “consistent tool” to ensure monitoring of the…