The French fund industry is composed of more than 600 asset management companies, and has been operating for some 15 years, including through two major financial crises.
By assets under management, it is the first financial management centre of European funds, and the second worldwide. One reason for its vibrancy is its ongoing development abroad. More than 70% of French asset management companies have foreign investors, and regarding boutiques, 35% of their assets are managed on behalf of non-domestic clients.
The natural playground for French asset managers is Europe, and they have been the first to benefit from the Ucits directive, as it was built after the successful track record of the organisme de placement collectif en valeurs mobilières (OPCVM) framework in France.
This is probably similar to the Alternative Investment Fund Managers Directive, close to the pattern of non-Ucits fund management. They had almost no cost for adaptation and were fully able to show their track-records to foreign clients.
As a paradoxical constraint, the saturation of the French fund market, because of its early development, acted as a booster for asset managers during the past decade.
This internationalisation of asset management developed either through external growth for the biggest players – buying or setting up local firms – or via the export of funds.
The local regulator, the Autorité des marchés financiers (AMF), contributed to make funds more competitive. There is, for example, the possibility of fast-track agreements for some local funds – agreed in less than a week – or through an efficient electronic filing for the cross-border notification of French Ucits throughout Europe.
Many local players have successfully experienced the Ucits cross-border master feeders, with master funds in France, to accommodate the positive and long track record of master funds with the wish of some foreign investors to invest in their own local funds. They have also been expanding internationally. It is clear that for today, and even more for tomorrow, the potential of savings growth is out of Europe; many players had anticipated this trend.
In China, India and Korea, for instance, asset management companies have taken various stakes in the capital of local firms, including joint ventures. In China, some asset managers obtained qualified foreign institutional investor licences.
Regarding mandates, many sovereign wealth funds make use of French managers’ skills, being equally located in Asia, Scandinavia or the Middle East. It is true also of foreign pension funds: of course, in Latin America, but also in the US.
Based on this daily reality, the Association Française de la Gestion Financière (AFG) decided, in co-ordination with the depositaries’ association, l’Association Française des professionnels des Titres, Paris Europlace, AMF and the treasury to launch a brand, the Paris Fund Industry.
Since June, a dedicated website has been facilitating the access from abroad to information and knowledge about the different members.
In addition, the dissemination of information to foreign professionals through the participation and sponsoring of international events has expanded: a Ucits conference in New York last winter; the Fund Forum Asia in Hong Kong; the Mutual Fund Summit in Mumbai last spring; the forthcoming Fund Forum Latin America in São Paulo and Alternative Investment Fund Managers Directive conferences in London this autumn. Next year, the Paris Fund Industry will host its own events, starting in Zürich in spring.
Stéphane Janin is a director and head of international affairs division at Française de la Gestion Financière, the French Asset Management Association.
©2012 funds europe