- Published: January 2012
- Region: Europe
Eastern European Asset Management Industry - Investment Analysis
- Published: September 2009
- Region: Europe
- 47 Pages
- Frost & Sullivan
A key offering of the Frost & Sullivan's business and financial services group is the financial benchmarking and analysis (FBA). This FBA on Eastern European asset management industry presents an overview of the Eastern European asset management industry with a primary focus on UCITS funds.
This Frost & Sullivan research service titled Eastern European Asset Management Industry - Investment Analysis provides market drivers and restraints, investment themes and growth monitor. In this research, Frost & Sullivan's expert analysts thoroughly examine the following: mutual funds and private equity.
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Eastern European Asset Management Industry Maintains Growth Momentum despite Recession
Although the eastern European asset management industry has felt the ripple effects of the global financial crisis, the region is expected to witness long-term structural growth due to favorable macroeconomic indicators. The gap in the development of the western and eastern European regions is likely to open up new opportunities in various sectors, including healthcare and financial services in the eastern European region during the medium-to-long term (five to15 years) investment horizon. The eastern European countries are required to exercise caution with regard to their fiscal position and remain wary of the risk of high inflation. "Lower penetration of mutual funds investments in household income suggests ample scope for retail investments," notes the analyst of this research service. "Effective marketing and awareness initiatives are likely to help the asset management companies in utilizing this opportunity."
Lower net assets as a percent of GDP is a pointer to the vast potential latent in the asset management industry. The central and eastern European countries have the lowest net assets. Rising political stability, pro-market reforms, growing purchasing power, huge infrastructure spending, and accession to EU membership make eastern Europe an attractive destination for investment. The economies of Bulgaria, Romania, Slovenia and Slovakia are poised to grow at a positive rate, attaining the peak during 2011 and 2012 and stabilizing thereafter.
The immediate prospects for the asset management segment look lacklustre at least until 2010, but retail investor confidence will improve during 2010. On the flip side, institutional investments such as pension funds compared to retail mutual funds are performing well owing to their long investment span and lock-in period. The eastern European countries are heavily dependent on foreign investments and encounter severe financial pressure due to dwindling FDI inflows into the economy. The region experienced a drastic decline in foreign investments since 2007 in the wake of the lending boom and financial crisis. This had led to the deterioration of the overall fiscal position in the eastern European countries. Juxtaposed with this factor, low market liquidity has remained an issue of concern for the market. The respective governments are taking corrective measures to address these concerns. Retail investors in the European countries prefer investing in bank deposits as they offer high rates of interest. Moreover, retail investors are not fully aware of the advantages offered by investment in mutual funds and other alternative investments. The high cost of trading in these regions has added to the level of angst. "There is also huge pressure on the Eastern European governments to streamline their policies, in order to comply with the EU rules," says the analyst. "Any lapse could prove costly for the governments and could affect their funding from EU and their membership." Currently, investors have displayed a preference for investing in funds denominated in Euro, in order to eliminate exchange rate risks.
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
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1 ASSET MANAGEMENT
- Eastern Europe
-- Research Scope
-- Eastern European Asset Management Industry - Overview
-- Growth Drivers and Restraints
-- Investment Theme 1
-- Investment Theme 2
-- Investment Theme 3
-- Growth Monitor
-- Concluding Thoughts
-- About Frost & Sullivan