Assets under management (AuM) in Europe have hit a record high in the first half of the year, according to the semi-annual asset report from Moody’s Investors Service.
The figure for the combined group of managers surveyed jumped to €12 trillion over the period, a 4% increase compared with the second half of 2020.
The surveyed firms included abrdn, Allianz Global Investors, Amundi Group, Anima Holding, Ashmore Group, Aviva Investors, AXA Investment Managers, Azimut Group, and Credit Suisse Asset Management, among others.
According to Moody’s, the increase reflected market appreciation during the first half of the year as global markets rebounded from the pandemic as well as growing investor optimism amid the global economic recovery.
The spike contributed to an 8% increase in revenue compared with the previous six months, though asset managers also saw their profitability drop slightly due to higher costs.
Fund inflows also continued to gather pace over the period, with total net inflows for the first half of 2021 climbing to €156 billion, equivalent to 1.4% of the AuM of the asset management firms surveyed at the start of the fiscal year.
Equity investments dominated while fee revenue also improved. Total fee revenue for the surveyed group rose 8% relative to H2 2020, while AuM drove a 9% increase in management fees, and a 2% pike in performance fees.
Net earnings were slightly down, however reflecting higher distribution costs and operating expenses than in H2 2020, when the pandemic had diminishing effect on cost growth.
Moody’s also highlighted that asset managers are coming under rising regulatory and commercial pressure to align with the global sustainability movement and support the global economy’s transition to net zero carbon emissions.
Asset managers within the G20 are responsible for $6.6 trillion of assets that hold carbon transition risk and will need to ramp up climate risk assessments and set clear goals for reaching net zero in their financed emissions, stated the report.
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