Asset management industry in Europe - statistics & facts
The volume of assets under management (AUM) in Europe has significantly increased in the past ten years. Rising by trillions of euros, the European AUM market has grown to attain global recognition. The asset management industry is particularly interesting as, unlike other parts of financial services, the relationship between asset managers and their clients is one of ethics and legal obligation, managers have full trading authority over client’s funds. This relationship between European asset managers and their clients has resulted in the establishment of an industry totaling almost 30 trillion euros in AUM as of 2023. This was a sizable portion of the total financial assets in Europe. With 20 trillion being managed for institutional clients and eight trillion being managed for retail investors, almost one-third of this market being overseen by third-party asset managers.
Asset management firms add to the European economy by increasing total assets in portfolios from Euro area funds. Firms also provide a service to investors who are assured that their chosen asset manager will act in their best interests.
Who is the beneficiary of these assets?
70 percent of the total assets managed in Europe are on behalf of institutional investors. These are large entities such as banks, insurance companies and charities that use pooled funds to invest in the market. Due to the substantial size of institutional investors, asset managers have the power to utilize block transactions when buying and selling, ultimately controlling the market. The remaining portion of AUM in the industry is owned by retail investors. These are Individuals investing with their own funds, typically in round lot amounts—the normal minimum quantity traded on a particular exchange. The vast majority of these investors who have utilized the asset management services in Europe are domestic clients.What is the asset manager and client relationship?
Investors choose to hand over control of their assets to their chosen asset manager, providing them with a large amount of autonomy while also generating a profit margin for the manager, typically paying them a percentage of the total portfolio value. But why would investors opt for this? Investors trust asset managers, as their primary role is to provide advice and ultimately determine what investments are appropriate. Over 120,000 people are directly employed across Europe and perform in such high-pressure roles. Making decisions that are in line with the goals and risk tolerance of their clients, while also having to consider the current and even future state of the market. While investors place a great deal of trust in the industry, the individual asset managers ultimately take responsibility for any gains or losses made.Asset management firms add to the European economy by increasing total assets in portfolios from Euro area funds. Firms also provide a service to investors who are assured that their chosen asset manager will act in their best interests.
