Fitch Ratings has asserted the importance of owing large and established funds in a recent statement.
“Of the 12,000 cross border funds, only 430 funds (3.5 percent) have more than €1 billion of assets. UK and US players are far better positioned than those in mainland Europe in the €1 billion+ funds segment,” said the ratings agency.
“Of the top 10 players with more than 25 cross border funds and highest proportion of flagships (more than €1 billion of assets), all but one are UK or US based.”
Aymeric Poizot, managing director in Fitch's fund and asset manager rating group added that these managers have benefited from their expertise in global products, emerging markets and fixed income, where flows have concentrated in the recent years, as well as an active cross border distribution strategy.
By contrast, Fitch Ratings stated, mainland European players offer fragmented fund ranges with: “few, if any, flagship funds,” adding that having fewer but larger funds allows more efficient administration, reporting, controls, and related support functions.
“Portfolio managers can also focus on fewer funds and spend less time on administrative and commercial tasks, allowing them to spend more time on portfolio management.
“Commercially, flagship funds are also more visible, can accommodate bigger investor tickets and serve more easily as benchmarks when fund managers promote their portfolio management.”
