Is the Spanish boom over?

The Spanish asset management industry has seen high level of inflows over the past two years, but a recent report by accelerando associates argues that the good times might not last for long.

According to data from industry association Inverco, Spain’s asset management industry AUM almost doubled between the end of 2012 and the first half of 2015 – from €122.3bn to
€218.4bn at its high point in May.

This has triggered another large wave of foreign asset managers aiming for Spanish investors.

“However, reallocations [to funds] from bank deposits, following the introduction of the cap on deposit interest rates by the Bank of Spain in early 2013, will come to an end soon,” argues Philip Kalus (pictured), managing partner at accelerando associates, which has issued a warning on the solidity of the base underpinning the recover in AUM.

“Rising interest rates may trigger monies flowing back from investment funds into bank deposits. In January 2017 Mifid II will come into place, which will have dramatic impact on wholesale distribution.”

The accelerando report highlights a few interesting facts about the Spanish industry, including that it is captive one and shows a hefty presence of foreign managers who have rushed to secure a place as the flows started to come in.

The Spanish fund industry currently manages €220.7bn, €108bn of which is invested in foreign domiciled funds. The number of funds registered in total is estimated at 13,596.

The number of managers is 207, with the market offering 303 funds of funds, and some 151 wealth managers.

The breakdown of the domestic fund managers, already only a little more than half of the total AUM, is predominantly dominated by BBVA, Santander and La Caixa, leaving other local independent asset managers facing a tough fight for assets in this bank dominated field.

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