Posted inAnalysisEurope

Europe: a growing cash cow for asset managers

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.

 

Part of the Bonhill Group.