The European Fund and Asset Management Association (Efama) has released its 15th Asset Management Report, predicting that assets under management (AuM) in Europe will grow to €29 trillion in 2023.
The findings mark a recovery from a 13.8% decline in 2022, which saw AuM drop to €27.8 trillion, primarily due to fluctuations in the bond and stock markets.
Key findings of the report include:
- Geographical Concentration: About 85% of asset management activity is concentrated in six countries: the United Kingdom, France, Switzerland, Germany, the Netherlands, and Italy.
- Investment Vehicles: By the end of 2022, investment funds and discretionary mandates managed in Europe accounted for EUR 15.7 trillion and EUR 12.1 trillion, respectively. This represents 56.5% and 43.5% of total AuM.
- Economic Impact: Euro-area investment funds held significant stakes in debt securities and listed shares, underlining the crucial role of asset managers in financing the European economy.
- Client Demographics: Retail clients increased their share in total AuM to 30% by 2022, with pension funds and insurance companies following. Assets managed for domestic clients constituted 68% of the total.
- Asset Allocation Trends: There has been a shift in asset allocation, with a decrease in bond investments and an increase in equity investments.
The report, with contributions from McKinsey, Cerulli and EFAMA corporate members, also delves into critical questions concerning the future of asset management. These include the impact of generative artificial intelligence on the sector, the growing investor interest in private assets and the ways asset managers can influence the business models of investee companies.
Tanguy van de Werve, Efama’s director general, said, “Given their long-term investment horizon, institutional investors are ideally placed to finance the sustainability transition.
“By entrusting their assets with investment managers, they can benefit from our industry’s fast-growing ESG expertise and engagement capabilities.”
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