Why the French are leading Europe’s asset management shake-up
Asset management is the hottest sub-sector in FIG investment banking in Europe. Even banks with successful in-house asset managers are thinking hard how to adapt, and must act fast.
Ask European investment bankers in financial institutions groups (FIG) about asset management, and their eyes light up. Here is a sub-sector where transformational deals are happening, even cross-border ones.
Soon after the 2008 crisis, it looked like the UK banks were showing the way forward for in-house asset managers – by selling them. Lloyds and RBS respectively sold to Aberdeen and Barclays to BlackRock.
Almost a decade later, however, asset management is vital to some of the most successful big continental banks, not least because it is relatively risk-free and capital-lite. The greater prevalence of bank distribution has slowed the rise of passive funds in Europe. Even on the continent, however, banks must think to the future. Regulators are pushing for more transparency on quality and cost, which will make it harder to stuff weak proprietary funds down bank clients’ necks.
Banks will have to offer funds that are more varied and better able to outperform the indices – emerging markets, alternative investments and not just local stocks and government bonds. Most cannot do so (or, at least, not well) on their own.