Fitch finds buyers prefer boutiques for European equities funds
Allocators have preferred boutiques running European equities to larger managers this year, as most of the 30 companies enjoying the largest net inflows sat outside the largest 30 houses for the strategy.
In the 12 months to July, research released today by Fitch found Schroders’ European equities program took in most, followed by BlackRock, and then banking group Credit Suisse.
Only Schroders and BlackRock sold more than €1bn of European equities products this year.
All the next most popular 17 groups were independent boutiques, including in descending order of assets Edmond de Rothschild, Fin Echiquier, Oddo Asset Management, Threadneedle, Mandarine, Alken AM and Dalton Strategic Partnership.
Aymeric Poizot (pictured), managing director in Fitch’s fund and asset manager rating group, said: “Among the 800 managers that are active in the European equity field, few are capturing new money. Interestingly, most of this new money is going to independent houses.”
In the year to 30 September Schroders ISF European Special Situations took in most money, net €1.15bn, over twice as much as Allianz RCM Europe Equity Growth, with €566m.
Then followed UBS (Lux) Inst Fd – Key Sel European Equity with €479m, Schroder ISF Euro Equity with €411m, and Invesco Pan European Structured Equity fund, with €394m net inflows.
The top 10 was rounded out by products from BlackRock (two funds), Dalton Strategic Partnership, DNCA and HSBC.
It has been a tough time picking European equities funds. Only one in three of the managers who were in the top quartile from 2005 to 2008 remained there until 2011.
The gap between average performance of top and bottom quartile funds was 20% every year since 2008. In 2007, the gap was just 12%.
Since the end of 2007 strategy assets have fallen 46%, coming from a combination of €116bn redemptions (roughly 20% of starting assets), plus €153bn investment losses. This was the fifth 12-month period to September that the sector had net outflows.
Fitch notes in the 12 months to September there were only 5% outflows from US equities funds, no net withdrawals from EM funds, and €115bn net inflows to global equity products.
The 12 months to 31 July was also a tough time for the 800 companies involved in the five sub-sectors of European equities. Only 38% of the firms took in net money, while the sector suffered net outflows of €12.3bn.
Fidelity remains the largest European equities house (€21.6bn), followed by BNP Paribas, BlackRock, and Allianz Global Investors, each with around €10bn, then Amundi and Union Investments. Only one in every 10 managers has over €1bn, and the largest 53 companies manage about two thirds of the sector’s assets.