Investire | Settembre 2023
According to PwC’s annual survey on Global Asset and Wealth Management, in four years 16% of AMCs will disappear as a result of the ongoing process of consolidation. In other words, one company out of six.
Inflation, market volatility and the rise in interest rates have caused a drastic reduction in commission fees – thus, 73% of asset management companies have been looking for possible aggregations with other companies to gain economies of scale and access to new market segments, to mitigate the level of risk and strengthen their market shares.
Polls suggest that the top ten global asset managers, which used to control little over 40% of the market in 2020, will extend their control to over 50% of the market by 2027.
In 2022 globally managed assets decreased by almost 10% (from 1277,5 to 115,1 billion dollars), the most drastic drop in the last decade.
This is an unavoidable process which, however, is expected to end with a trend reversal: in fact, by 2027, globally managed assets will supposedly reach 147,3 billion dollars (+28% as compared to 2022).
In this context, what is the current situation and evolution of the sector in Italy? We are well aware that Italians are good savers, but bad investors, as evidenced by the over one thousand and seven hundred billion euros in liquid assets currently on checking accounts.
Liquid assets have always represented a big opportunity for asset management companies, which have reached our country in bulk: in fact, the number of active AMCs has doubled over the past twenty years.
In Italy, 2022 marked a moment of strong discontinuity with the past – the volatility of the markets and the bad habit of leaving the markets in bearish sessions caused perceived losses in the average portfolios of investors comprised between -10% and -20%.
Moreover, AMCs have had to compete with old, indomitable rivals: government bonds, deposit accounts and bank bonds.
Moreover, while in 2019 financial advisors aimed to include at least 15 AMCs in their portfolios, currently the average number has dropped to 7.
In addition, in 2007 76% of financial advisors used to select AMCs/funds autonomously and only 24% of them followed their bank/network’s guidelines. Currently, numbers look very different: 32% of financial advisors select AMCs/funds autonomously, while 68% of them tend to offer the selection of funds made by their bank/network.
Today, it would seem, open architecture has been banned by most.
Strong pressure on the margins, control over the correct asset allocation and risk has led several banks to build their own AMCs (e.g., Fineco Asset Management and Mediolanum International Funds) or to invest more on internal AMCs (e.g., Intesa Sanpaolo with Eurizon and Credit Agricole with Amundi).
So, what lies ahead? The top ten big AMCs will see their market shares expand, while margins will reduce; moreover, 25-30 small-medium companies will be able to excel and control specific market segments, led by managers capable of competing for the rest of the market.
This process will result in an additional natural selection of the best talents, both in terms of distribution and in terms of AMCs, which will also guarantee the survival of the species.
Nicola Ronchetti