The Changing European Fund Landscape

Article • November 22, 2021

After a decade of unprecedented change, what will the next ten years bring the asset management industry?

ContactUs

In the last 20 years Europe has established itself as a robust, reliable, and well-regulated funds market. Ireland and Luxembourg have developed into the world’s top cross-border funds centers and UCITS funds have become a gold standard among investors all over the world.

However, the asset management industry is going through a period of upheaval as changing investor preference and industry consolidation promise to reshape the landscape. In the face of this upheaval, what will the European fund landscape look like at the end of the decade and what will asset managers need to do to adjust and succeed?

In this survey, conducted in partnership with Funds Europe, we looked at how changes in product development, distribution, and ongoing industry consolidation could alter the European landscape.

These are the five key takeaways:

The Future is Green: More than half (51%) of respondents believe that having an ESG platform will be critical to asset managers’ success.
Luxembourg and Ireland Lead the Way: 95% of respondents expect the two leading cross-border domiciles to maintain their dominance over the next decade.
UCITS Faces Challenges: Increased regulatory and anti-money laundering (AML) burden was cited as the biggest challenge facing UCITS funds over the next decade by 40%, followed by limitations on strategies (30%).
FinTech Disruption is Coming: Fund platforms are seen as most susceptible to disruption by FinTechs by 45% followed by advisors (32%).
Consolidation Will Continue: 100% of the survey respondents expect asset management consolidation to stay at the same pace or increase over the next decade.

Despite the inherent uncertainty in trying to predict the future, the one thing we know for certain is that the European fund landscape will continue to evolve. This evolution will present both opportunities and challenges for managers. Understanding what the trends are can help firms think about their strategy and better prepare them for any unexpected bumps in the road.