Asset management industry consolidates despite high inflows

The European fund industry could collect 278.5 billion Euro since the beginning of the year. Despite those high inflows, the number of discontinued funds exceeds the number of launches. The pressure to consolidate remains high.

In the first three quarters of this year, European equity and balanced funds received inflows of 278.7 billion Euro from investors. Despite those inflows, 1.915 funds were closed while only 1.311 funds were launched.

Within the third quarter, fund launches have decreased by 5.6 percent compared to the second quarter to 453 funds, says the Lipper-Report from Thomson Reuters. 646 funds were closed in the third quarter of this year. 324 funds were closed due to mergers with other funds. The number of funds closed due to liquidations increased slightly in the past quarter to 322 funds.

Due to the high capital inflows “it is surprising that the industry is still cautious with the launch of new products”, says Detlef Glow, author of the Lipper-Reports and head of EMEA Research at Lipper. Because of mergers of some asset managers in the last few years, some funds could be found twice in the product portfolio of fund managers. The focus of asset management companies is now to eliminate those double funds. The consolidations and product portfolio reduction is an effect of the increasing cost pressure on the asset management industry.