| French asset managers see net outflows |
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| 09/03/2008 | |
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French asset managers saw €44.7bn in net outflows in 2007, the first year of declines in a decade, according to a fund analysis company. France's banks were not immune from the reversal in fortunes with AXA, BNP Paribas and Société Générale recording net outflows of €4.8bn, €3.9bn and €3.5bn respectively. Société Générale's dynamic management products were particularly hard hit. One winner was Crédit Agricole as it solidified its position with €4.6bn in net subscriptions. Grouporama also posted net inflows of €3.5bn. The data comes from EuroPerformance which contacted asset managers representing €998bn in assets as of December 2007. Venture capital funds and futures funds were excluded from the survey. The survey covered 1,999 equity funds. (French funds include emerging market equity as part of an equity fund as opposed to alternatives). Of the total, 886 international equity funds were analysed, followed by European equities (400). A total of 187 alternative funds were covered, 1,249 diversified funds, 738 bond funds, 786 guaranteed or formula funds and 717 money market funds. The analysis cites three factors impacting the flows, including change in subscriptions (net new money), fund performance and income (payout of dividends). "Despite the climate of mistrust that prevailed over the summer towards those vehicles exposed to securitisation and the credit market (money market dynamic, absolute return and alternative funds), and a turbulent equities market in the second half, assets under management remained relatively stable compared with the end of 2006," notes the study. Alternatives gain In the first six months of 2007, the change in net cash flow was actually positive and assets under management topped €1tr. The turning point came in August. "Over the year as a whole, only alternative management funds and guaranteed vehicles posted net inflows of €4.4bn and €1.3bn respectively." One explanation for the net inflows is that alternative funds (which include investments in fund of hedge funds) are less driven by market movements, says Alexandre Cassan, Head of Research at EuroPerformance. Equity funds that target international growth and emerging market funds managed by specialist asset management companies also saw net inflows of €3.5bn. "During 2007, France's leading banking networks reinforced their money market positions, whilst asset management companies chose to substantially reduce theirs." The study looks at the weight of banks and asset managers in the commercialisation of money market funds, concluding that banking networks held 79% of assets in December 2007 compared to 76% a year earlier. During the same period asset managers saw their position drop from 24% to 21%. It is still too early to evaluate the full impact of the US sub-prime mortgage crisis on these vehicles, however, the French Association of Corporate Treasurers (AFTE), has requested that French fund managers "commit to a greater level of transparency with respect to their underlyings." Separately, the AMF has recommended the restatement of certain money market fund shares from cash equivalents to corporate debt. VB |
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