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 a survey conducted by KNEIP, the fund services provider.
In a survey of 47 European asset managers, administrators and promoters, KNEIP found that 42% intended to use private banks more, a rise of 14% over last year; 34.3% plan to focus more on direct sales, also representing an increase of 14%; and 31.4% plan to use more in-house agreements within banks, which was an increase of 26% over 2010.
UCITS IV will have the greatest impact on the fund management industry over the next 12 months, according to 94% of respondents. That is up from 83% last year.
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, says Bob Kneip, CEO of KNEIP. 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 stabilizes.
The survey also found that global investors are increasingly looking at investment opportunities in South America and Australia. Although Europe remains the most popular investment destination for respondents, a total of 74.3%, or 9% fewer than last year, said the continent remains their focus.
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, Kneip says. 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.
(CG)