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The investment fund industry
The latest trends in a dynamic market
Mathieu Maurier, Country Manager for Societe Generale Securities Services (SGSS) in Luxembourg since 1 September, looks at a number of issues currently facing the asset management industry.
UCITS is still unassailable
Few fund structures are held in such high esteem as the UCITS—a product that helped augment Luxembourg’s position as a leading European fund domicile and is widely purchased by retail and institutional investors worldwide. Harmonization has allowed the UCITS to flourish within the EU while its strong reputation for transparency and investor protection has seen it succeed on the global stage, acquiring a loyal following in Asia-Pacific and Latin America and turning the structure into a €10 trillion plus industry1.
Unlike other products, which have struggled to stay competitive, the UCITS has effortlessly evolved in line with market and consumer trends and expectations over the last 30 years. Following growing investor demand for greater portfolio diversification, regulators responded with UCITS III, which expanded the list of eligible assets managers could trade by allowing firms to use derivatives, leverage, and synthetic short positions.
Meanwhile, post-crisis versions of UCITS addressed investor concerns about the asset management industry by imposing new protective and transparency measures: namely, reporting requirements in the form of the KIID (Key Investor Information Document) and a requirement for fund houses to appoint a depositary subject to strict liability for any loss of assets or financial instruments, bringing the rules into line with the AIFMD (Alternative Investment Fund Managers Directive).
1 Efama (March 12, 2018) 2017 was an exceptional year for the European investment fund industry, with net assets of UCITS and AIF surpassing the EUR 15 trillion mark
Performance magazine issue 28, January 2019
Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.