According to the latest data published by instiHub Analytics, the EMEA Delegated Fund Industry reached a new record with EUR1,666 billion in assets with over 1,600 fund sponsors delegating to third party asset managers by the end of March.
Sub-advised Funds, where investment management is delegated via customised mandates, reached EUR1 trillion in total after 6.4 per cent or EUR63.5 billion growth for the quarter. Third party fund allocations by Fund-in-Fund sponsors, the second pillar of the overall Delegated Fund Industry, grew by 4.5 per cent or EUR26 billion to EUR605 billion. Fund-in-Fund’s delegate investment management by holding other mutual funds rather than by commissioning customised mandates.
The three largest buyer segments of third-party managers’ investment capabilities are Wealth Managers, Asset Managers and inhouse asset managers of large Bank Distributors – each delegating more than EUR300 billion in assets to third parties. The first two experienced above average growth of 7.8 per cent and 6 per cent, respectively. Bank Distributors grew by 4 per cent with Ireland-based Mediolanum and Fineco showing above average growth at 4.7 per cent each. Mediolanum is the largest overall sponsor within the Bank Distribution channel in Europe with EUR40 billion in assets allocated to third party managers.
Within the sub-advised fund space, 179 mandates have been lost and awarded during the quarter. EUR32.3 billion or 3 per cent of total assets were involved, impacting 117 asset managers. The win and loss sides of switches between appointed managers often cancel each other out. During Q1, the largest new additional mandate, which was not a switch, was awarded by Mediolanum appointing US-based NZS as a delegate in his Technology Fund.
Andreas Pfunder, CEO of instiHub Analytics, says: “Delegated Fund industry growth has broadened further during Q1 with sponsor positioning and high activity levels indicating a continued expansion. We expect strong growth to continue over the coming quarters and longer term – particularly in the sub-advised fund space. New solutions platforms are being established by very large, dominant market players. These businesses only make sense at large scale to offer more cost and margin effective choices for distributors and asset owners alike. Third party asset managers therefore have to be in the sub-advisory game to keep in lockstep with industry shifts.”