Platform assets across Europe (including UK) surpassed €5,000bn at the end of 2023, according to Platforum’s recent European Fund Distribution: Platforms report.
Platforms continue to take a higher proportion of total UCITS distribution as more institutions and advice firms outsource their access to funds. Close to a third of UCITS assets are now administered via platforms in Europe, with further growth driven by UCITS’ popularity in Asia, the Middle East and Latin America.
But the most significant developments in recent months are all about alternatives.
European investors hold a far lower proportion of alternatives in their portfolios than US investors, and a small increase in allocation would represent a significant uplift in assets. Alternative asset managers want to see this through the ‘retail-isation’ of private assets.
Feeder-fund structures from the likes of iCapital and Moonfare initially provided more retail-friendly access and now the cross-border institutional platforms are rolling out services that support complex fund structures. Conferences are full of discussions of semi-liquid, evergreen, ELTIFs and LTAFs.
Alternatives provide asset managers and platforms with a clear opportunity. European investors are arguably under-weight in the alternatives asset class, which may be more insulated from the relentless fee pressure felt by traditional active funds.
Some alternatives asset managers and distributors think that the only real barrier to expanding the retail market for these investments is a bit more ‘education’. In practice it will need a lot more than some better marketing collateral to persuade European investors to become more like their North American counterparts. The alternatives industry will need to understand in some depth what drives the various consumer and adviser markets. Only then will they be able to make inroads into this potentially rich market.
European Fund Distribution: Platforms covers the pan-European platform market, including market sizing, profiles of major firms and analysis of trends. It’s available as a single report or part of a broader Platforum research subscription. Get in touch for more details.