European Asset Managers set to broaden Distribution Models in the next 12 months

8 August 2011

Latest survey from KNEIP suggests reappraisal of the distribution channels asset managers plan to use over the next 12 months.

Research also highlights increasing appetite to invest in Australia and South America.

Fund distribution through private banks, direct sales and proprietary channels (such as distribution agreements with banks) is set to increase significantly during the next 12 months, according to the latest research from KNEIP, a leading solutions provider to the asset management industry.

KNEIP surveyed 47 European asset managers, administrators and promoters and found that:

• 42.9% of respondents planned to use private banks more, up by 14% from 2010
• 34.3% of respondents expected to focus more on direct sales, an increase of 14%
• 31.4% planned to use proprietary channels, special in-house agreements within banks, which has had a significant 26% increase in the last 12 months.

The survey also found that 94% of respondents cited that UCITS IV would have the most impact on the fund management industry in the next 12 months, up from 83% from last year.

Bob Kneip, Chief Executive Officer of KNEIP commented:

“The implementation of new regulation such as UCITS IV is pushing asset managers to forge closer relationships with investors as indicated by the increased focus on direct sales. The rise in private bank distribution channels suggests that some asset managers are increasingly targeting high net worth individuals as the recovery from the financial crisis stabilises.”

“With UCITS IV officially in place this month, preparation and implementation is clearly the top priority for asset managers. While a grace period exists until January 2012, asset managers are reappraising their distribution models, exploring solutions to help them navigate through a complex regulatory environment.”

New Geographies Opening Up

Global investors are increasingly looking to invest in South America and Australia, according to the KNEIP survey. While Europe remains the main market for investor demand, with 74.3% selecting this geography as a focus, it has decreased by 9% from last year.

Mr. Kneip continued: “Developing markets, such as Brazil and Chile, offer a relatively untapped source of emerging wealth, with GDPs increasing by about 10% in the last year. Australia also represents a huge market opportunity as a hub for product exportation to Asia. This coupled with local regulatory changes which have opened up these markets for non-domestic funds in recent years, make these huge growth opportunities for asset managers moving forward.”

Methodology

KNEIP surveyed a range of European asset management industry participants to understand key trends, challenges and opportunities in the European fund industry. The survey was conducted during a 4-week period in April 2011 and asked 47 European asset managers, administrators and promoters.

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