ManCo Barometer Poster 2019: latest figures, trends and key insights from our survey on Circular 18/698
Laurent Carême & Pierre-Marie Bochereau - PwC Luxembourg
Luxembourg continues to play a pivotal role in international fund distribution. As of December 2018, it hosted 316 UCITS and AIFM licensed Management Companies (ManCos); up 19 from 297 in December 2017 (a 6.4% increase), with 6/19 entrants coming from the UK. Licensed AIFMs increased by 14 to 242, and over 20 new licenses were granted for MiFID related activities.
The overall increase in ManCos contributes positively to the PwC ManCo Index (Barometer) which takes into account the number of UCITS ManCos and licensed AIFMs, their number of employees and AuM. The number of employees in UCITS ManCos increased 12.2% year-over-year (y-o-y) to 4,874. The AuM, however, remained flat, finishing at EUR 3.38tn at the end of 2018.
The Barometer, baselined at 100 in December 2010, closed an all-time high of 203.5 by the end of 2018, with a 4.5% y-o-y increase.
The positive trend in ManCos employment should continue into 2019 as ManCos, in accordance with CSSF Circular 18/698 (August 2018) requirements, add resources to fill gaps. Of those expecting to hire, 61% plan to add 1 to 3 FTEs. The additional staff will be mainly required to cover oversight of delegated functions, compliance and legal, and risk management duties.
Key challenges for ManCos trying to ensure compliance with Circular 18/698 include updating internal policies and procedures, diligence over delegated activities, operational controls over distribution and portfolio management, and review of internal control systems.
Other observable trends in Luxembourg include the arrival of big players such as Jupiter Asset Management International and M&G, and M&As and consolidations to leverage scale and efficiencies in the increasingly competitive environment. For third party business, FundRock acquired SEB Fund Services, and Hauck and Aufhäuser acquired Sal. Oppenheim Luxembourg Funds. Warburg Invest Luxembourg S.A. joined the Apex Group, and renamed itself as Augeo Capital Management SA.
The good news for Luxembourg is expected to continue in 2019 as 83% of our survey respondents remain bullish on it remaining the hub for European ManCos.
The annual PwC ManCo Barometer poster also remains in good demand. It includes snapshots, trends and ranking tables (ManCos, Licensed AIFMs, 3rd Party ManCos) and survey results.
The top 5 ManCos by AuM as of 31 December 2018 are:
1. JPMorgan Asset Management (Europe) S.à r.l.
2. DWS Investment S.A.
3. ⬈ Amundi Luxembourg S.A.
4. ⬊ BlackRock (Luxembourg) S.A.
5. UBS Fund Management (Luxembourg) S.A.
