Asset managers’ key role is to diversify their client’s portfolio and reduce risk. In a similar fashion, investment migration professionals’ function is to offer a viable risk mitigation strategy by presenting their client with a Plan B.
Insulation against civil unrest in their country of residence, against economic instability or extraordinary global volatility such as this pandemic which has certainly thrown a spanner into the works. We take a closer look at the asset management industry.
Growing assets under management
Weathering the Covid- 19 storm, European funds suffered a decline of 11% in the value of Assets under Management in Q1 2020 before rebounding in the subsequent quarter by 8.3% according to Delbecque, Senior Director for Economics and Research at EFAMA. The prognosis for European Funds in 2021 is looking favourable, highlighting fund and asset managers’ strategic decision-making power in how European funds are invested.
Asset managers present both traditional and alternative asset classes to their affluent clients to mitigate risk and diversify their portfolio in terms of the asset class type, target jurisdiction and industry.
Asset management has been exponentially growing as an industry in the wider wealth spectrum with AUM having increased more than two-fold in just over a decade.
The two key asset management clients are retail clients (equity investors overall) and institutional clients. In Europe the latter are composed of pension funds and insurers predominantly.
To understand the importance that asset managers play in deciding the assignment and apportionment of wealth and funds, data from the European Central Bank is used as a basis to assess two key parameters – debt securities and listed shares issued by Euro residents and asset managers. According to the data, by the end of 2018, European asset managers oversaw about 25% of debt securities and 30% of listed shares – an undeniably substantial portion of the wealth ‘cake’.
Read more: Wealth Management 2.0 – What UHNWIs are looking for now
What is EFAMA and why is their latest report ‘Asset Management in Europe’ of any significance?
EFAMA is the voice of the European investment management industry, predominantly all EU Member states. The recently published report on asset management provides an overview of the industry, compares it to other financial service sectors, highlights investment trends in Europe and calculates the importance asset management has in financing the economies in Europe.
In the wake of the global pandemic, and with renewed European ambitions around sustainable finance and the development of the Capital Markets Union, our industry will continue to be a driving force for positive change, economic growth and financial security
Tanguy van de Werve, Director General of EFAMA
Key findings in EFAMA’s recently published report on the industry included:
- The pivotal role asset managers play in channeling investors funds into capital markets and bolstering liquidity in economies – an increasingly important matter during these trying pandemic times when liquidity is limited.
- Increasingly, assets are being assigned to third party asset managers with the key markets being the United Kingdom, France, Germany, Switzerland, Netherlands and Italy.
Asset management and alternative residency/citizenship
Building relationships and connections with these strategic decision makers (asset managers) is quintessential to any professional that seeks to garner interest and channel investment into their own service offering. Be it investing in cryptocurrency, gold or an arts fund in Portugal that also acts as a stepping stone to a European residency permit/golden visa.
Asset managers’ key role is to diversify their client’s portfolio and reduce risk. In a similar fashion, investment migration professionals’ function is to offer a viable risk mitigation strategy by presenting their client with a Plan B.
Insulation against civil unrest in their country of residence, against economic instability or extraordinary global volatility such as this pandemic which has certainly thrown a spanner into the works. All this uncertainty can be mitigated through a second passport or golden visa that offers investors with the option to invest in real estate, funds or shares abroad, depending on the specific programme and secure global mobility at this time.
Therefore it is of paramount importance that asset managers and citizenship investment experts extend hands and collaborate cohesively to best serve their clients’ needs. You can read more on EFAMA.
