Asset managers have key role in Capital Markets Union – Efama

Capital marketsThe importance of asset management to Europe’s economy makes the industry a key player in the EU’s plan to make capital markets more efficient and get money into the real economy, says the European Fund and Asset Management Association (Efama).

In its annual industry review, Efama shows that total assets under management (AuM) in Europe increased by about 15% in 2014 to €19 trillion.

The industry consists of 3,300 asset management companies, directly employs 90,000 people and a further 410,000 indirectly.

The report reiterates Efama’s position that the European asset management industry has an important role to play in the Capital Markets Union (CMU), which seeks to make capital markets a more important source of finance to Europe’s economy, and to channel savers’ money into financial instruments more efficiently.

One way of doing this, says the body, is with its proposed cross-border European personal pension.

According to Efama, data for the end of 2013 showed euro-area households held 42% of their financial wealth in currency and bank deposits, and 9% in investment funds. The figures for the US were 16% and 15%, respectively.

“In view of this, one of the objectives of the CMU should be to put European savings to better use,” the report says.

The differences between the US and Europe illustrate how much improvement could be made to matching savers with borrowers, leading to lower borrowing costs, increased savings and higher economic growth, Efama says.

The report also shows that the level of investment in funds and discretionary mandates was at a record high for the end of 2013 in Europe. Discretionary mandates represented €8,572 billion (52%) of total AuM, while fund assets stood at €7,884 billion (48%).

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