Published: March 3, 2022
Despite challenging market conditions, the European asset management industry rode a wave of positive investor sentiment and substantial fund inflows over the past two years. Now things are becoming less predictable with increasing regulation and heightened macro-economic and geopolitical uncertainty.
The pandemic has been a testing time for the European asset management industry. As was the case with so many business sectors, the industry was forced to contend with an unpredictable operating environment, and was buffeted by a series of sudden shocks.
That said, the sector was able to demonstrate impressive resilience in the face of crisis. According to a report from the European Fund and Asset Management Association (EFAMA), the total assets under management in Europe stood at €27tn as we started the new decade. This figure rose to €28.4tn by the end of 2020 and €31.3tn by Q3 2021, which is a clear continuation of the growth trajectory that has been underway in recent years.
Digging into the data there is a none-too-surprising dip in March 2020 at the beginning of the Covid-19 pandamic, followed by a swift market correction. According to consulting firm McKinsey, European investors withdrew more than €100bn in the first quarter of 2020, as they directed their money away from riskier assets. However, markets recovered rapidly, leading to net annual inflows of €750bn across all asset classes and segments. That growth continued throughout 2021.