Alternative Investment Funds (AIFs) domiciled in the European Union amounted to €4.9 trillion in 2017, according to a report from the pan-European financial regulator Esma.
The Paris-based body’s first statistical report on AIFs found that, as measured by net asset value, the sector reached €4.9 trillion or nearly one third of the total EU fund industry.
The report is based on data from 26,378 AIFs, or 80% of the market, and will in future be published annually.
Funds of funds accounted for 16% of the industry, followed by real estate funds at 11%, hedge funds at 5% and private equity funds at 4%. Other AIFs account for close to two-thirds of the industry (63%).
Most AIFs, the report found, are sold to professional investors (81%) but retail participation is significant (19%), with the highest share in the funds of funds and real estate categories.
Esma chair Steven Maijoor said: “Esma’s analysis of the data collected from AIFs gives a first comprehensive overview of this important sector.
“Our data analysis has highlighted some issues requiring further attention, including the issue of fund classification, while the liquidity mismatches identified in the real estate funds sector, with its important share of retail investors, indicates potential risks for investors.”
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