Asset Managers

With the hype around artificial intelligence and despite its high-profile failures and misuses, it’s clear the global financial sector has plenty of interest in AI, especially in hopes of finding yet another way to outsource low-complexity work. Many large financial firms have set up special departments to explore and lead the introduction of the technology in its various product offerings.

Plans to increase Europe’s capital markets capacity hinge on giving retail investors access to private assets, but liquidity remains a sticking point. Evergreen funds, designed to offer investors some liquidity in otherwise illiquid assets, are being touted as a solution.

This week’s overview of transfers, appointments, promotions and other career news in the fund and asset management community in and outside Luxembourg includes updates from Crédit Mutuel Asset Management, the European Securities and Markets Authority (Esma), M&G, Schroders, Carmignac and Vistra.

As Luxembourg’s financial ecosystem adjusts to the open finance revolution, wealth and asset managers must navigate a range of hurdles to stay competitive.

The rapidly declining profitability of traditional asset management is driving European fund houses to accelerate their pursuit of smaller players, with private equity firms becoming key targets in a wave of consolidation.

Luxembourg’s financial regulator has issued a relatively small fine for a class of transgression with huge implications for the industry: valuations of funds, in particular for unlisted alternative investments.

European asset managers must pursue economies of scale to stay competitive with their US counterparts, argues Vincent Juvyns, a market strategist at JP Morgan Asset Management. Fragmentation across Europe’s capital markets is also a key issue that hinders competitiveness, he says.

French banks are making significant strides that could reshape the European asset management landscape. The acquisition of AXA Investment Managers by BNP Paribas heralds a new era under Basel III regulations, according to Mediobanca Andrea Filtri. “The once-forbidden dream is now reality, opening new horizons for mergers and acquisitions,” he said.

Euroclear, the Brussels-based securities custodian and settlement giant, has taken a significant step forward in the private markets space by securing a partnership with BlackRock, the world’s largest asset manager.

The first half of 2024 revealed contrasting fortunes for European asset managers as they navigate volatile markets, shifting investor sentiment, and regulatory pressures.