Sun, Apr 20, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Cerulli: Multi-asset investment strategies attract interest in Europe, but managers still cautious

Thursday, March 25, 2010
Opalesque Industry Update - Interest in multi-asset investment strategies in Europe has never been higher, according to the new Cerulli Special Report: European Multi-Asset Investment Strategies. Total assets using a multi-asset approach stood at an estimated €848 billion (US$1,191 billion) as of 2009. Funds sourced from institutional investors account for €341 billion as of September 2009, based on Cerulli’s multi-asset manager survey conducted in January 2010, riding on the back of rising interest in fiduciary management and diversified growth funds. In the retail space, managers are seeing a resurrection of demand for new balanced funds that invest in a range of asset classes including alternatives. These flexible allocation funds registered a strong 5-year compound annual growth rate (CAGR) of 23.1% to reach €115 billion as of 2009. Cerulli estimates the 5-year CAGR to 2014 for the retail segment, including both traditional and new balanced funds, to stand at 8.0% or €746 billion.

“Multi-asset investments are most attractive to investors who lack resources for specialization as it is presented as a convenient, one-stop solution. Cerulli identifies the mass retail and affluent investors, the DC market, and small-to-medium sized pension funds as three key segments that possess the greatest asset gathering opportunities,” said Shiv Taneja, the managing director of Cerulli’s international practice.

Though the recent market meltdown created impetus for multi-asset strategies, an equally swift recovery would challenge its growth, because managers are cautious about the long-term viability of the approach. “Multi-asset investments tend to garner interest in every market downturn because of its flexibility and risk mitigation abilities, however the challenge is to ensure sustained demand especially when equity markets rally,” said senior analyst Yoon Ng, the report’s principal author.

Global fund managers are best positioned for the multi-asset business, because they can leverage existing scale and product offerings. However, skill and not scale is crucial to success, which means boutiques could do equally well by specializing in key asset allocation functions and outsourcing secondary roles. Across Europe, the U.K. holds the greatest opportunity for multi-asset gathering opportunities both in the retail and the institutional space. This is due to investors’ greater risk appetite and receptiveness to new products.

These findings and more are available in the latest Cerulli Special Report: European Multi-Asset Investment Strategies. - KM - Source

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  3. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  4. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  5. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo