The report aims to provide a unique and comprehensive set of facts and figures on the state of the industry at the end of 2018 but also to highlight the fundamental role of asset managers in the financial system and wider economy.
This year's edition of EFAMA's Asset Management Report sheds new light on the key role played by the European asset management industry in managing long-term savings and allocating financial resources across industries on behalf of European citizens. In the wake of the global pandemic, and with renewed European ambitions around sustainable finance and the development of the Capital Markets Union, our industry will continue to be a driving force for positive change, economic growth and financial security.
Some of the key findings and observations include:
Assets under Management (AuM) rose from EUR 10.8 trillion in 2008 to EUR 23.1 trillion at the end of 2018.
Investment fund assets represented EUR 12,614 billion or 54.6% of total AuM at the end of 2018, steadily rising every year since 2011. The share of discretionary mandate assets stood at 45.4% of total AuM and amounted to EUR 10,482 billion.
At the end of 2018, more than 75% of European investment fund assets were managed in five countries: the UK (27%), France (18%), Germany 15%), Switzerland (9%) and the Netherlands (7%). AuM of discretionary mandates are even more concentrated, with 67% of assets being managed in the UK and France.
Asset allocation and clients of the industry
In a market mainly dominated by institutional investors, bond assets accounted for 42% of investment portfolios, compared to 28% for equity assets and 6% for money market and cash equivalents at the end of 2018. However, the share of bonds and cash/money market instruments has been gradually declining in recent years, in favour of alternative assets. Another important trend is the growing share of passive management of long-term assets.
At the end of 2018, pension funds became, for the first time, the largest industry clients, with a market share of 29%, ahead of retail clients and insurance companies.
Domestic clients are by far the biggest group of clients of the European asset managers. Whereas their share in total AuM reached 73% in 2018, domestic clients represent an even higher share of AuM in most European countries.
Financing of the economy
Asset managers in Europe held an estimated 25% of debt securities and 30% of listed shares issued by euro area residents at the end of 2018. When using the free-float market capitalization, it is estimated that they held 53% of the value of the overall listed shares issued by the euro area residents.
At the end of 2018, the industry employed directly an estimated 115,000 individuals across Europe with 75,000 in the UK, France, and Germany alone. The report estimates that an additional 525,000 individuals are indirectly employed by the industry through related services such as fund distribution, advice and administration.
According to our estimations, total Assets under Management in Europe amounted to circa EUR 25.8 trillion at the end of 2019. The Covid-19 pandemic led to a 11% decline of Assets under Management during the first quarter of 2020. This was followed by a rebound of 8.3% in the second quarter. Thanks to the positive news on the Covid-19 vaccine front, it is likely that the value of Assets under Management will reach another historical height by the end of 2020.