Last updated: 06:31 / Thursday, 3 March 2016
Thomson Reuters Lipper Report

The European Fund Industry Showed Further Consolidation in 2015

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The European Fund Industry Showed Further Consolidation in 2015
  • The number of products available to European investors decreased by 538 funds during the year 2015
  • The consolidation of the European fund industry might continue over the foreseeable future, and even a supportive market environment —with rising equity and bond markets—might not stop the trend

The Thomson Reuters Lipper ‘Launches, Liquidations & Mergers in the European Mutual Fund Industry: Q4 2015’ report, available here, highlights the following trends int he industry:

Over the course of the year 2015 the European fund industry launched 2,162 new products, while 1,573 funds were liquidated and 1,127 products were merged into other funds. This meant the number of products available to European investors decreased by 538 funds during the year 2015.

At of the end of December 2015 there were 31,931 mutual funds registered for sale in Europe.

Luxembourg continued to dominate the fund market in Europe, hosting 9,174 funds, followed by France, where 4,572 funds were domiciled.

For Q4 2015, a total of 704 funds (444 liquidations and 260 mergers) were withdrawn from the market, while only 563 new products were launched.

“Since the European fund industry enjoyed high net inflows for 2015, it is surprising the industry was still cautious with regard to fund launches. There were a number of mergers between asset managers over the last few years, which led to a number of duplications in the respective product ranges that need to be cleared to achieve economies of scale. In addition, there was still a lot of pressure on asset managers with regard to profitability, which also drove the cleanup of the product ranges. This pressure might even increase, once the new regulatory frameworks are fully applied, since not all the costs related to regulation can be passed on to investors and will therefore become a burden on the asset management industry”, explain Detlef Glow, Head of EMEA Research, Thomson Reuters Lipper, and Christoph Karg, Content Specialist Germany & Austria, the authors of the report.

“In this regard the consolidation of the European fund industry might continue over the foreseeable future, and even a supportive market environment —with rising equity and bond markets—might not stop the trend. But, the consolidation should at least slow, since increasing assets under management can lead to higher income for fund promoters”.

“We might also see an even higher pace of consolidation in the number of funds available to investors in Europe, if the volatility investors experienced in the markets during December 2015 and January 2016 continues over the course of 2016”.

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