Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CONTEXT

Top target markets for cross-border distribution in Europe

1.3.3

If more and more UCITS funds get distributed internationally and as much as 36% of total cross-border UCITS are registered in more than ten countries 22 , which are the target distri- bution countries?

Graph 15 displays the top 25 target markets for cross-border distribution in Europe in terms of number of funds registered for distribution in each country at the end of 2010.

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 Number of cross-border funds Graph 15: Top 25 target markets for cross-border fund distribution in Europe

1.3

Germany ranks first in terms of cross-border funds registered for distribution in the country. It is followed by Austria and Switzerland.

0 500

7 - ITALY

5 - SPAIN

4 - FRANCE

25 - LATVIA

20 - JERSEY

18 - GREECE

9 - FINLAND

22 - POLAND

2- - AUSTRIA

15 - IRELAND

10 - SWEDEN

12 - NORWAY

1 - GERMANY

11 - BELGIUM

24 - ESTONIA

21 - SLOVAKIA

14 - DENMARK

13 - PORTUGAL

23 - GUERNSEY

3 - SWITZERLAND

6 - NETHERLANDS

17 - LUXEMBOURG

19 - LIECHTENSTEIN

Source: PwC, March 2011

16 - CZECH REPUBLIC

8 - UNITED KINGDOM

Clearly, there is a bulk of eight markets open to more than 3,000 foreign fund registrations each. They are the most open markets; Germany is far ahead of all others, with almost 6,000 foreign fund registrations, two thirds of which are domiciled in Luxembourg. The second most open European market is Austria, while the third one, Switzerland, is not a member of the European Community. According to the annual PwC study on cross-border distribution, in 2010 alone 4,485 new re- gistrations of UCITS were made in European countries, with Switzerland being the country that received the highest number of new registrations (532 within the year 2010). Both the Netherlands and Spain moved up in the hierarchy of the target markets receiving high numbers of new registrations, illustrating the interest from international asset mana- gers of these two countries in terms of potential new money flow. Then come the United Kingdom and France, with around 3,800 funds registered for distri- bution in each country. They are closely followed by Italy, with 3,600 funds registered at the end of December 2010. Wealthy Scandinavia should be carefully watched by foreign European asset managers as a target market for fund distribution, especially Sweden, which ranks 9th in terms of number of cross-border funds registered for distribution in the country. Between December 2007 and December 2010, this number increased by 71%. Over the same period, the number of cross-border funds registered for distribution grew by 49% in Denmark and by 27% in Finland and Norway.

22 Source: PwC, March 2011. 35% of cross-border funds are distributed to 3 or 4 markets only, 29% to 5 to 9 countries and 36% to 10 or more countries.

Cross-border distribution of UCITS | page 27