Asset Managers

Private equity is under increasing pressure to innovate in response to growing competition, according to Hylke Hertoghs and Bastiaan van Slobbe, managing partners at Marktlink Capital.

More than half of the investment funds and ETFs sold in Europe now consist of passive investments. Over the past three years, this market share has increased from 34% to 56%. This trend is largely driven by two major US firms, BlackRock and Vanguard.

This week’s overview of transfers and appointments in the fund and asset management community in and outside Luxembourg includes updates from State Street, Clearwater Analytics, Axa Investment Managers, Blackrock and S&P Global.

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.