May 2012

IN NUMBERS: Disappearing act

MagicianGermany’s fund launches fell to a record low last year. Stefanie Eschenbacher investigates. Asset managers in Germany have been focussing on consolidation of their available ranges, owing to weaker investor demand, increased regulation and cost pressure. Detlef Glow, head of Lipper Europe, Middle East and Africa research, and Christoph Karg, content specialist for Germany and Austria, recently analysed launches, liquidations and mergers in Europe. According to their Lipper Fund Market Insight Report, published last month, the fund market saw a net decline of 722 funds. While a total of 2,749 funds were created in Europe, 2,028 funds were liquidated and 1,443 funds were merged. Glow and Karg argue the focus was on consolidation, following Ucits IV, which allows cross-border fund mergers and passports. The key investor information document, which replaces the existing simplified fund prospectus, has taken up additional resources. Another factor was the demand from investors to distinguish real money market products from products with a similar targeted performance but different underlying securities. This has led to huge administrative efforts for all fund management companies. Glow and Karg compared their findings for the European market with the latest statistics from Bundesverband Investment and Asset Management, Germany’s trade body for the asset management industry. German members of the association, excluding those in Luxembourg, Ireland and elsewhere, had €1.47 trillion of assets under management at the end of February. Both sets of statistics came to a similar conclusion: the focus has shifted from launching new products to consolidation and strengthening existing funds. In 2007, Germany saw twice as many fund launches as last year. Mischfonds, or mixed asset products, were the only type that saw a net increase, as Aktienfonds, which invest in equities, and Rentenfonds, or pension funds, declined. Of the 419 funds launched in Germany last year, 110 were Aktienfonds, 98 were Rentenfonds, 128 were Mischfonds and 83 classified as others. Over the same time, 170 Aktienfonds, 104 Rentenfonds, 93 Mischfonds and 69 others liquidated or merged. Because the market continues to be dominated by domestic players, products are likely to match the conservative and risk-averse preferences of Germans. ©2012 funds europe

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