Asset managers are embracing the UCITS IV directive in Europe, and are turning to master/feeder structures as the number of asset managers and funds decline, KPMG reports.
“The fund industry is currently facing numerous challenges in these turbulent economic times that have impacted assets under management and profitability across the industry,” said Peter De Proft, director general of the European Fund and Asset Management Association. “One of the important strategic steps for players in the UCITS industry is to fully explore how to take advantage of UCITS IV.”
Vincent Heymans, a partner with KPMG in Luxembourg, added, “The current economic environment has presented the fund management industry with numerous challenges. It is therefore crucial now, more than ever, that fund managers fully realize the efficiency and consolidation opportunities found within UCITS IV, which allow for cost savings and improved efficiency of operations.”
One of the key components of the updated directive is the Management Company Passport that allows an asset manager to operated from a single centralized location. Respondents to a survey said the most critical factor in selecting a location will be taxes (49%), followed by regulations (44%) and the availability of qualified personnel (33%).
Forty-nine percent said they plan to restructure their offerings, with small fund size and high costs to investors being key drivers.