There is up to $1 trillion of fund management business available in the Continental European pension...
There is up to $1 trillion of fund management business available in the Continental European pension fund market, according to Barclays Global Investors.
There are around 40 million more people living in continental Europe than the US although the US pension fund market is more than $1 trillion larger.
Lindsay Tomlinson, chief executive, Europe, at Barclays Global Investors, said that this leaves an unexplored pension fund market of at least $1 trillion on the Continent.
He also pointed out that further expansion opportunities will come from areas including China which has opened its borders to foreign asset managers.
Tomlinson added that there are problems to be surmounted if these market opportunities are to be taken.
Speaking at the Institute of Economic Affairs annual conference he said: "Different legal and regulatory frameworks in different countries will be the biggest problem for the foreseeable future. Simple logistics also represent a massive hurdle. Where does one establish offices?
"Are they all going to be fund management offices or will some of them be client servicing offices? How does one recruit in countries thousands of miles away?
"Yet the biggest hurdle will be how to distribute products on a global basis. Customers need to feel secure in the knowledge that buying an Italian equity fund in Sydney from Barclays Global Investors means the same as buying an Italian equity fund in Amsterdam from the same company."
Tomlinson added that with the shift from DB to DC pension products, schemes will tend to be targeted at the individual and fund management groups will have to change to adapt to this.
He said investment products will need to be transparent and understandable to the ordinary investor.
He said: "Successful fund management firms must be ready for this, developing ideas of brand and new methods of distribution to suit.
"They must also realise that pensions are unlikely to remain a segregated part of an individual's portfolio.
"Individuals are becoming more financially aware and asset managers need to cater for the entire scope of their needs. In terms of the niche players there will always be special demands to be met by specialist players in the industry."
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