More than one-third of respondents to Cerulli's proprietary survey of European managers said fiduciary management was negative for institutions making investment decisions
In its inaugural report on the state of the European institutional asset management industry, European Institutional Investor 2013 finds the average minimum yield targets asset managers set for institutional clients-of 3% to 5%-would largely fail to make what many clients need to satisfy guarantees, and even to survive.
Key findings in this 86-page report include: German insurers will need bailing out, and more Dutch pensions will cut pay-outs. "Institutional fund managers are being severely tested on numerous fronts, and pressure over the coming years from their clients, rivals, and regulators will show which players have the nimbleness and mettle to survive, and which do not," says David Walker, the report's author and London-based senior analyst with Cerulli Associates.
The European Institutional Investor 2013 report identifies deep discord over Europe's fiduciary management industry, worth €1 trillion (US$1.3 trillion). More than one-third (38%) of respondents to Cerulli's proprietary survey said fiduciary management was negative or very negative for institutions making investment decisions, while just more than a quarter (27%) said it was positive, says Laura D'Ippolito, the report's quantitative analyst.
The report also explores how the use of segregated accounts has changed since the global financial crisis, as alternative and traditional fund allocators isolate portions of managers' strategies, and demand transparency to prepare for proposed Solvency II capital charges.
The research investigates how fund managers are innovating in the wrapping and design of products, to make them palatable to institutions whose investment decisions are often guided more by regulations than by prospects of returns. Across all the themes it covers, European Institutional Investor 2013 discusses how asset managers should react.