The direction of travel under MiFID II is firmly in motion. Distributors are selecting from fewer funds and scaling back the number of asset managers they work with.
This trend, begun at the domestic level in places like the UK with its ‘RDR’, is gathering momentum at the European level as MiFID II comes into force from January. The trend is clearly reflected in our Europe roundtable.
But it also reaches beyond Europe as global distributors extend the MiFID II model into other regions. It means asset managers need the capability to wrap products in fund structures appropriate to various countries. But it also means that firms are under pressure to produce at least one product ‘blockbuster’ that can meet the needs of a wide range of distribution houses and benefit the manager with almost guaranteed flows.
In summary, asset management firms are under pressure to become larger. One of our roundtable participants says: “There will remain a continuum from small to large [asset managers], it’s just that small will now be an order of magnitude bigger than it was ten years ago.”
Nick Fitzpatrick, group editor, Funds Europe
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