European Investment Management 2004

TABLE OF CONTENTS
CHAPTER 1 EXECUTIVE SUMMARY 3
Introduction 3
Market context 3
Client focus 5
Competitive dynamics 6
CHAPTER 2 INTRODUCTION 23
What is this report about? 23
Who is the target reader? 23
How to use this report 24
CHAPTER 3 MARKET CONTEXT 25
Introduction 25
Key findings 25
Key European trends 27
Economic and financial drivers 27
Total funds under management 32
Market Analysis 32
Country snapshots 36
Belgium 36
Finland 38
France 39
Germany 40
Ireland 41
Italy 42
Netherlands 43
Norway 44
Spain 45
Sweden 46
Switzerland 47
UK 48
Mutual funds 49
European overview 49
European harmonisation 50
Mutual fund total market analysis 51
Retail mutual fund market analysis 53
Institutional mutual fund market analysis 55
Retail mutual fund asset allocation 57
Life and pensions funds 59
European overview 59
Life and pensions funds total market analysis 60
Regulatory developments 61
Asset allocation 63
Non-life insurance funds 64
European overview 64
Non-life funds total market analysis 65
Asset allocation 67
Data 68
Total European assets 68
Country specific data 70
Country specific data 70
European mutual funds 77
European life and pensions 81
European non-life assets 83
CHAPTER 4 CLIENT FOCUS 85
Introduction 85
Key findings 85
Customer preference 86
In-house or outsource 86
Choosing an investment manager 88
Attracting customers 92
Customer retention 95
Servicing clients 95
Contacting clients 97
Losing clients 98
Customer outlook 100
Choosing an Investment manager 100
Future focus 101
Data 103
CHAPTER 5 COMPETITIVE DYNAMICS 111
Introduction 111
Key findings 111
European developments 112
Selling off asset management capabilities 112
Consolidation 113
Focus on asset management 114
Expanding asset management capabilities 114
Competitor profiles 116
No. 1 - Deutsche Asset Management 116
No. 2 - AXA Investment Managers Limited 118
No. 3 - SG Asset Management 120
No. 4 - ING Investment Management 122
No. 5 - Credit Suisse Asset Management 123
European Competitors 125
Country Snapshots 126
Belgium 126
Denmark 127
Finland 128
France 129
Germany 130
Ireland 131
Italy 132
Netherlands 133
Norway 134
Spain 135
Sweden 136
Switzerland 137
UK 138
Data 139
Competitor data 139
Europe 140
Belgium 141
Denmark 141
Finland 142
France 143
France 143
Germany 144
Germany 144
Ireland 145
Ireland 145
Italy 145
Netherlands 146
Norway 146
Spain 147
Spain 147
Sweden 147
Switzerland 148
Switzerland 148
UK 149
UK 149
CHAPTER 6 ACTION POINTS 150
Opportunities 150
CHAPTER 7 APPENDIX 152
Definitions and abbreviations 152
General defintions 152
Research Methodology 155
Further reading 156
Datamonitor Reports 156
Datamonitor Global Wealth Service: Insight Reports 156
Datamonitor Global Wealth Service: Competitor Tracking 157
Datamonitor Financial Services Consulting 158
SPP writing team 159


LIST OF TABLES
Table 1: Total European assets under management segmented by fund type, 1998-2002 68
Table 2: Total European assets under management, segmented by country, 1998-2002 68
Table 3: Investment assets segmented by country and market sector, EURm 2002 69
Table 4: Belgian assets under management, segmented by fund type, 1998-2002 70
Table 5: Danish assets under management, segmented by fund type, 1998-2002 70
Table 6: Finnish assets under management, segmented by fund type, 1998-2002 71
Table 7: French assets under management, segmented by fund type, 1998-2002 71
Table 8: German assets under management, segmented by fund type, 1998-2002 72
Table 9: Irish assets under management, segmented by fund type, 1998-2002 72
Table 10: Italian assets under management, segmented by fund type, 1998-2002 73
Table 11: Dutch assets under management, segmented by fund type, 1998-2002 73
Table 12: Norwegian assets under management, segmented by fund type, 1998-2002 74
Table 13: Spanish assets under management, segmented by fund type, 1998-2002 74
Table 14: Swedish assets under management, segmented by fund type, 1998-2002 75
Table 15: Swiss assets under management, segmented by fund type, 1998-2002 75
Table 16: UK assets under management, segmented by fund type, 1998-2002 76
Table 17: Total retail and non-retail mutual fund assets, segmented by country, 1998-2002 77
Table 18: European retail mutual fund assets, segmented by country, 1998-2002 78
Table 19: Non-retail mutual fund assets, segmented by country, 1998-2002 79
Table 20: Retail mutual fund assets segmented by country and asset class, 2002 80
Table 21: Life and pension fund assets segmented by country, 1998-2002 81
Table 22: Life and pensions assets, segmented by country and by asset class, 2002 82
Table 23: Non-life insurance assets, segmented by country, actual values, 1998-2002 83
Table 24: Non-life insurance assets segmented by country and asset class, actual values, 2002 84
Table 25: What percentage of your investments do you manage in-house? 103
Table 26: Why do you outsource investment management? 103
Table 27: As a pan-European company, do you use investment managers in each country or just in your country of origin? 104
Table 28: How did you go about selecting the last investment management company that you chose? 104
Table 29: If you use a pension consultant, what would happen if you disagreed with their choice of Investment Manager? 105
Table 30: At what level in your company are the decisions regarding which Investment manager/s to use made? 105
Table 31: How many investment managers do you use? 106
Table 32: When you selected your last investment management company, how important were the following attributes? 106
Table 33: When an investment manager is trying to win your business, how important is it that you meet the following people? 107
Table 34: Which of the following elements of service are the most important? 107
Table 35: How often does your investment manager contact you about your investments? 108
Table 36: Is the frequency of contact with your investment manager too much, too little or just right? 108
Table 37: What would most likely lead you to switch Investment Manager? 109
Table 38: How often do you switch Investment Manager? 109
Table 39: Has the market downturn placed more emphasis upon any aspects of your choice of Investment Manager? 110
Table 40: Deutsche Bank’s quarterly results Q1/2001 - Q3/2003 139
Table 41: AXA Investment Managers results 2000-2002 139
Table 42: Top 30 asset managers in Europe by office AuM, 2003 140
Table 43: Top 10 asset managers in Belgium by office AuM, 2003 141
Table 44: Top 10 asset managers in Denmark by office AuM, 2003 141
Table 45: Top 10 asset managers in Finland by office AuM, 2003 142
Table 46: Top 20 asset managers in France by office AuM, 2003 143
Table 47: Top 20 asset managers in Germany by office AuM, 2003 144
Table 48: Top 10 asset managers in Ireland by office AuM, 2003 145
Table 49: Top 10 asset managers in Italy by office AuM, 2003 145
Table 50: Top 10 asset managers in the Netherlands by office AuM, 2003 146
Table 51: Top 10 asset managers in Norway by office AuM, 2003 146
Table 52: Top 10 asset managers in Spain by office AuM, 2003 147
Table 53: Top 10 asset managers in Sweden by office AuM, 2003 147
Table 54: Top 20 asset managers in Switzerland by office AuM, 2003 148
Table 55: Top 30 asset managers in the UK by office AuM, 2003 149


LIST OF FIGURES
Figure 1: Life and pensions assets continue to outweigh non-life and mutual fund assets, 2002 4
Figure 2: Across Europe, 47% of life and pensions institutions outsourced a proportion of their investment management. 5
Figure 3: Local players dominate the investment management market in France, 2003 6
Figure 4: Average GDP dropped sharply in 2000 but recovered in 2002 27
Figure 5: The average stock market performance of the thirteen European markets adversely affected total investment assets, 1998-2002 28
Figure 6: European stock indices have all picked up in 2003 29
Figure 7: Investor preference has shifted in recent years, retail mutual fund equity exposure has been reduced in favor of bond and money market exposure, 2000-2002 31
Figure 8: Life and pensions assets continue to outweigh non-life and mutual fund assets, 2002 32
Figure 9: Total assets under management, grew from EUR6,269bn to EUR7,933bn, 1998-2002 33
Figure 10: The UK had the largest total assets under management in Europe, at EUR2,016bn, 2002 34
Figure 11: Germany has the most mutual fund assets under management in Europe, 2002 35
Figure 12: Belgian assets peaked in 2001 at EUR241.7bn 36
Figure 13: Growth in the Danish market leveled off over the 2000-2002 period 37
Figure 14: Mutual funds are a small but growing market in Finland, 2002 38
Figure 15: France is the 2nd largest mutual fund market, the 2nd largest life and pensions market and the 3rd largest non-life market in Europe, 2002 39
Figure 16: Germany is the largest mutual fund market, the 3rd largest life and pensions market and the largest non-life market in Europe, 2002 40
Figure 17: The Irish investment market is dominated by life and pensions assets, 1998-2002 41
Figure 18: Italy is the 4th largest mutual fund market, the 5th largest life and pensions market and the 5th largest non-life market in Europe, 2002 42
Figure 19: As a result of the relatively high exposure to equities in the Netherlands, investment assets suffered over the 2000-2002 period 43
Figure 20: Life and pensions assets dominate the Norwegian investment management market, 2002 44
Figure 21: Spain is the 5th largest mutual fund market, the 8th largest life and pensions market and the 7th largest non-life market in Europe, 2002 45
Figure 22: Sweden saw a sharp decline in its investment management market over the 2000-2002 period due to the high exposure to equities 46
Figure 23: Switzerland is the 6th largest mutual fund market, the 6th largest life and pensions market and the 4th largest non-life market in Europe, 2002 47
Figure 24: The UK is the 3rd largest mutual fund market, the largest life and pensions market and the 2nd largest non-life market in Europe, 2002 48
Figure 25: European mutual fund assets under management initially grew in 2000 by 7.8% despite the falling equity markets 49
Figure 26: In 2002, Germany was the largest mutual fund market in Europe, followed by France 51
Figure 27: Institutional assets consistently made up around a third of total assets over the 1998-2002 period 52
Figure 28: France is by far the largest retail mutual funds market 53
Figure 29: Germany leads the way in institutional mutual funds, 2002 55
Figure 30: Retail mutual funds have a relatively high exposure to equities with 25.0% of retail mutual fund assets invested in equity funds 57
Figure 31: Life and pension asset growth has stopped in recent years 59
Figure 32: UK life and pensions remain by far the largest in Europe, 2002 60
Figure 33: Bonds and equities dominate life and pension fund investments across Europe, 2002 63
Figure 34: Non-life assets have increased every year since 1998 64
Figure 35: Germany is the largest non-life investment market in Europe, 2002 65
Figure 36: Non-life asset allocation has changed little over the equity downturn 67
Figure 37: What percentage of your investments do you manage in-house? 86
Figure 38: Why do you outsource investment management? 87
Figure 39: Do you use investment managers in each country in which you have a presence or just those in your country of origin? 88
Figure 40: How did you go about selecting the last investment manager that you chose? 89
Figure 41: If you use a pension consultant, what would happen if you disagreed with their choice of Investment Manager? 90
Figure 42: At what level in your company are the decisions regarding which Investment manager/s to use made? 90
Figure 43: How many investment managers do you use? 91
Figure 44: When you selected your last investment management how important were the following attributes? 92
Figure 45: When an investment manager is trying to win your business, how important is it that you meet the following people? 93
Figure 46: Which are the most important elements of service? 96
Figure 47: How often does your investment manager contact you about your investments? 97
Figure 48: What would be most likely to lead you to switch Investment Manager? 98
Figure 49: How often do you switch Investment Manager? 99
Figure 50: Has the market downturn placed more emphasis upon any aspects in your choice of Investment Manager? 100
Figure 51: Italian investors will be focusing almost exclusively on European investments 101
Figure 52: Spanish investors preference of fixed income/equity mix 102
Figure 53: Deutsche Asset Management sits within the PCAM division of Deutsche Bank 116
Figure 54: Deutsche Bank’s asset management and wealth management segment has seen declining costs and rising revenues in 2003 117
Figure 55: AXA Investment Managers has managed to increase revenues despite the poor equity markets over the 2000-2002 period 118
Figure 56: Net income has suffered for the Asset Management arm since 2000 120
Figure 57: Credit Suisse Asset Management sits within Credit Suisse First Boston the investment bank 123
Figure 58: CSAM’s assets under management are invested across a range of asset classes, 31/12/2002 124
Figure 59: Deutsche Asset Management is the largest European investment manager by either office or regional AuM, 2003 125
Figure 60: KBC is by far the largest asset manager, with 3.6 times more assets under management than the next largest Dexia, 2003 126
Figure 61: The Danish market has many competitive asset managers although Nordea is the market leader by office assets, 2003 127
Figure 62: In Finland, as in Denmark, Nordea is the largest asset manager by office assets AuM, 2003 128
Figure 63: The French market is dominated by French asset managers such as Societe Generale and AXA, 2003 129
Figure 64: DekaBank is the market leader by office assets in the competitive German asset management market, 2003 130
Figure 65: The largest players in Ireland are all Irish, with Bank of Ireland leading the way by office assets, 2003 131
Figure 66: Sanpaolo IMI is the clear market leader in the Italian market by office assets, 2003 132
Figure 67: Dutch asset managers dominate the market in the Netherlands, 2003 133
Figure 68: Norway has two market leaders by office assets, both with around EUR14bn in AuM, 2003 134
Figure 69: BBVA has almost 84% share of the top 9 Spanish asset managers’ office assets under management, 2003 135
Figure 70: AB Svensk and Folksam lead the market in Sweden, with over EUR10bn in office AuM each, 2003 136
Figure 71: The Dutch-owned Robeco leads the market in Switzerland with over EUR90bn in office AuM, 2003 137
Figure 72: Deutsche Bank is the clear market leader in the UK industry with over EUR650bn in office AuM, 2003 138