Bringing you live news and features since 2006 

European distribution is no level playing field says Cerulli

RELATED TOPICS​

New research from Cerulli Associates finds that asset managers that opt for a cover-all distribution strategy, instead of taking into account the individual tastes and needs of institutions in different European countries, are at risk of failing.

The latest issue of The Cerulli Edge finds that following the customised approach is no simple task. The firm warns that success entails finely balancing growth ambitions with the additional costs this route incurs.

 
While distribution is evolving across the globe, Cerulli points out that the European market presents its own challenges. “Despite the best intentions of the founders of the European Union, the trading bloc remains something of a patchwork quilt when it comes to financial regulation. Asset managers seeking to capitalise on the opportunities that come with a population of some 503 million – the world's third largest after China and India – also need to factor in the different languages, currencies and cultures.”
 
"The face of distribution in Europe is altering significantly. Strategies need to be adapted to each market as well as each asset manager's capabilities and goals if success is to be realized," says Barbara Wall, Europe research director at Cerulli Associates, noting that growing interest among European institutions in diversification is giving rise to new opportunities.
 
European institutions are learning to expect the unexpected according to Wall. “Managers' distribution strategies that once did not even make the menu are now being considered as a "main course" by some allocators.”
 
Developing relationships can be logistically tough, the firm warns. “A basic pan-European strategy needs regular visits to ten capitals, from London to Munich to Helsinki, one practitioner told Cerulli. Germany alone has investment centres in Berlin, Hamburg, Cologne, Dusseldorf, and Stuttgart. The diverse landscapes – languages, regulatory environments, historical experiences, and preferences – also raise the costs of doing institutional business in Europe compared with, say, the United States.”
 
Narrowing one's focus can save expenditure, says Cerulli. A strong brand identity also helps when crossing borders, often providing the edge for large organisations.
 
"Cerulli research shows that cutting out the middleman in distribution is a key objective for institutional asset managers this year–one which we believe will persist given that cost-cutting pressures are not likely to abate anytime soon," says Justina Deveikyte, an analyst at Cerulli.
 
 

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Ryan McCormack, Invesco
This year sees the 25th anniversary of Invesco’s QQQ, the USD240 billion ETF – the fifth largest ETF in the...
ETFs
The European ETF market achieved a record 28 per cent growth – reaching over USD1.8 trillion assets under management (AUM)...
Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by