Fri, 13/06/2014 - 16:07
The asset management industry enjoyed its fastest growth last year since the economic crisis and recorded its second consecutive year of expansion, but huge challenges and opportunities remain.
Across the investment landscape, major upheavals are reshaping the industry, driven by sector developments and regulatory change.
That was the message of Christian Dargnat, president of the European Fund and Asset Management Association (EFAMA), at the association’s Annual General Meeting (AGM) held in Bucharest.
During the event EFAMA, which currently collectively represents EUR17 trillion in assets under management, 1.5 times the GDP of the EU, welcomed two new corporate members and three new associate members.
Hosted by the Romanian Association of Asset Managers (AAF), the AGM provided an opportunity for EFAMA to engage with its national associations and corporate members. Following the renewed emphasis placed on the future of financial regulations in Europe in the wake of recent EU elections, this is a particularly pertinent time to provide an open forum for debate around key industry issues.
Discussion focused on the scale of regulatory initiatives emerging from the EU and the rest of the world such as PRIPS, MiFID, UCITS V, and the impact of implementation. However, the overall future outlook for the industry is positive with Dargnat noting that despite the temporary setback in the long-term growth of assets managed by the industry generated by the financial crisis, various studies now predict a rise to about USD100 trillion by 2020, equivalent to a compound growth rate of nearly six per cent in the coming years.
Dargnat noted that global wealth is increasing and will lead to further investment. Even if emerging markets catch the larger part of this growth, Europe will see average growth of three per cent in the coming years.
Asset growth is returning but it will be invested differently. Investors’ expectations have changed and they have new needs that must be met. The continued fast growth of low cost beta and alternative solutions confirms a structural shift in the market. The increased popularity of these asset classes will probably continue.
Particularly in the wake of the upheaval across the European institutions, the members reconfirmed the importance of transparency, open debate and engagement with the policy agenda to ensure representation of all industry perspectives and ultimately, to secure investor protection. Alongside this, the opportunities arising from regulation were noted as changes in investor behaviour become more widespread.
Dargnat also highlighted the key priorities for EFAMA for the year ahead, including providing a strong united voice across the industry, offering viable solutions to the issue of long term investment, supporting the asset management industry in its role in financing the economy and safeguarding the end investor.
He said: “One of the pillars of EFAMA’s work is addressing our over-arching task of rebuilding trust. Over the course of the last year, we have helped the industry to confront, with some success, the three major challenges that I identified at our last AGM: the huge number of regulatory initiatives under way in Europe and also in the US; the lack of a level playing field for financial products and the erosion of profitability. More than ever, EFAMA has a key role in facilitating the development of the asset management industry and in protecting the interests of the end investor and those of EFAMA members. We look to continue to work closely with legislators, our members and industry participants to ensure that we can support both our industry and the wider economy in a constructive way.”
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