RETHINKING DISTRIBUTION

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Scenario Planning Global Fund Distribution

Figure 15

Comparative advantage

Business as usual

EU domiciled funds will have a comparative advantage for international distribution but European players will face increased competition from emerging market players in both their home countries and Europe.

Despite increasing competition from emerging market players in emerging markets, the European AM market remains out-of-reach and still dominates international fund distribution activities.

In emerging markets only UCITS / AIFM brand Dominant Challenged

Hindered path

Loss of global dominance

EU domiciled funds will lose their dominance as other regional or national frameworks reach critical mass. They may even be locked-out of the major emerging markets and have to compete in Europe with new entrants from emerging markets.

Other national/regional fund frameworks will be developed and reach critical mass to bring safekeeping of assets to emerging markets. European AMs will have to cope with increasing regulatory barriers and competition in emerging markets.

In emerging markets and in Europe

Competition from emerging market players

The economic and demographic fundamentals of emerging markets support the view that it will be the “future growth engine”of the global fundmanagement industry. This key driver will pose both opportunities and threats to the European asset management industry in the future, which is captured through the scenarios (see figure 15).

Currently the total funds under management (FUM) across Asia (ex-Japan) and South America account for about 10% of global FUM which is set to increase in the future. Given these prospects the question on emerging competition from local players stemming from these regions should be considered. These players could not only compete with European players in their local markets where they have the respective expertise and understanding but also in European markets where they would compete predominantly on emergingmarket products.

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