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By Beverly Chandler, Opalesque London:
The investment research firm, Cerulli Associates, has published a study on the European fund of fund sector which shows more optimism for the investment style than many had predicted.
The key finding of the report, Cerulli Quantitative Update: European Funds of Funds 2011, is that fund of funds’ assets are expected to rise almost 7.5% per year to €673.3 billion (US$968.9 billion) by 2015. This comes despite a tough sales environment. Funds of funds were dramatically affected by the 2008 credit crisis with many forced to gate redemptions or close while they got their portfolios in order.
However, Cerulli finds that regulatory change post-credit crisis may suit the sector as greater outsourcing to discretionary managers drives growth across all the major markets. The report claims that the European fund-of-funds sector is big and mature. "Whilst assets are in recovery mode, sales are not," says Yoon Ng, the report's lead analyst.
The report finds that in terms of sales, there are marked differences across the European Union with the UK showing as the strongest market. Ng believes that distribution is to blame for weak sales in France, Germany, and Spain. Here again, the low sales are put at the door of the credit crisis. Ng says: "Where banks are the key distribution channel, their focus on gathering deposits to shore up their own capital, or offering guaranteed funds to ultra conservative investors, is hurting fund of...................... To view our full article Click here
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