According to Cerulli, bank-owned asset managers accounted for two thirds of inflows from European investors in 2014 and 2015. Their comeback is somewhat counterintuitive, as one of the goals of Mifid II is to force banks to improve the transparency of their charging structure. This is supposed to create a level-playing field, removing a perceived unfair advantage of in-house funds over external ones.
However, in a time bank profit margins are being squeezed by record-low interested rates while inducement bans or restrictions have only been implemented in a handful of EU member states, many banks have been reinvigorating their profitable asset management arms.
“One of the catalysts has been the return of mass retail investors to the funds market—an investor group that has traditionally been a focus of banks,” says Barbara Wall, Europe managing director of Cerulli.
However, independent managers are also profiting from the resurgent banks, through the exponential growth of their funds-of-funds operations, which often include funds from independent managers.
Funds-of-funds have been especially popular in Germany, the Netherlands and Southern Europe. As Alexandre Garrabou von Trotha, head of funds-of-funds at Banc Sabadell in Barcelona, told Expert Investor recently, his assets under management have grown from €200m in 2013 to close to €2bn now.
According to Angelos Gousios, an associate director at Cerulli, this distribution channel grew cumulatively by 43% in the last couple of years, bringing a combined €158 billion of net inflows