paris, a place of excellence for asset management in europe · afg | paris, a place of excellence...

1AFG | Paris, a place of excellence for asset management in Europe, 2020 Edition

PARISA PLACE OF EXCELLENCEFOR ASSET MANAGEMENT

IN EUROPE

10 keypoints

2 AFG | Paris, a place of excellence for asset management in Europe, 2020 Edition

PARIS

AN INDISPENSABLE PLACE

FOR ASSET MANAGEMENT IN

EUROPE


AFG presentation 3

Key figures of asset management in Eurozone 4

10 key points 5

1 Largest asset management market 72 Leader in collective asset management 8

3 Largest domestic market for distribution 9

4 Unrivalled know-how for innovation 10

5 Leadership in sustainable finance 11

6 Competitive positionning confirmed by high marks 12

7 Accessibility to foreign investors 13

8 Domicile of choice for the provision of services 14

9 At the cutting edge of Fintech and digital finance 15

10 A commited regulator 16

Contact 20

TABLE OF CONTENTS


ABOUT AFG

The French Asset Management Association (Association Française de la Gestion financière, AFG) is the professional organisation representing the French asset management industry.

Asset management is about helping retail and professional investors to provide for their future and achieve other long-term goals. Individuals and organisations entrust their savings to asset managers, who seek to increase their value by investing in the real economy via companies’ shares or bonds, government bonds, and infrastructures’ assets.

The French asset management sector is the largest in continental Europe: 650+ asset management companies employ directly and indirectly 85,000 people and invest on behalf of their clients more than 4,000 billion euros in bonds, shares and other assets.

About 50% of French asset managers commercialise their funds on a cross-border basis, and more than 30% of the assets managed by our members are issued by corporates or states of the Euro zone (excluding France), which makes our industry a key source of funding for the European economy.

ASSET MANAGEMENTINDUSTRY


29%

20%

12%

3%

France

Spain

The Netherlands

Italy

Germany

36%

TOP 5 OF AUMMANAGED IN MAJOR MARKETS IN THE EUROZONE

NUMBER OF ASSET MANAGERSAND TOTAL ASSETS

1st

1st

1st in assets under management

managed in the Eurozone

650+

Asset managers

€4,000+ bn Total assets

€1,960 bn UCls

€2,225 bn Mandates

€550+ bn Managed for

foreign investors

1st in number of UCITS

offered to the public in Europe

(excluding hubs)

€

€

€

€

€

€ €

Keyfigures

Figures as at end 2019.


1

3

10 keypoints

4

6

2

France, the largest market for asset management in the heart of continental Europe and the Eurozone

Unrivalled know-how for innovation in asset management

Easy accessibility of French funds and mandates to foreign investors

A committed regulator for the development of the French and the European regulatory framework

The largest domestic market for distribution of investment funds and asset management mandates

Competitive positioning confirmed by high marks in international rankings

At the cutting edge of Fintech and the digital finance

Leading domicile for collective and discretionary asset managers

Leadership in sustainable finance

A domicile of choice for the provision of services to other European markets

9

7

10

8

5


FRANCE, THE LARGEST MARKET FOR ASSET MANAGEMENT IN THE HEART OF CONTINENTAL EUROPE AND THE EUROZONE

Assets in the major centres of the Eurozone(In € bn)

France

Germany

Spain

Italy

The Netherlands

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

CISs Mandates

Mandates

Mandates

Mandates

Mandates

CISs

CISs

CISs

CISs

0500

1,0001,5002,0002,5003,0003,5004,000

201920182017201620152014

France is the largest asset management market in continental Europe

4,000+ billion euros in assets are managed in France

22% of assets managed in continental European collective investment schemes are French

France is the leading domicile of domestic funds in Europe

France

Germany

Spain

Italy

The Netherlands

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

CISs Mandates

Mandates

Mandates

Mandates

Mandates

CISs

CISs

CISs

CISs

0500

1,0001,5002,0002,5003,0003,5004,000

201920182017201620152014

1

Source: AFG (FR), BVI (DE), ASSOGESTIONI (IT), CNMV (ES), Dnb (NL)

Evolution of assets(CISs and mandates – in € bn)

France Germany

Source: AFG (FR), BVI (DE)


FRENCH INVESTMENT FUNDS ARE EUROPEAN LEADERS IN COLLECTIVE ASSET MANAGEMENT

Assets of asset management groups per domicile in the major continental european centres(Market shares of assets under management - main European markets, in %)

Note

650+ asset managers of which 450 entrepreneurials

The largest non-American asset manager is French, and 3 of the top 5 European asset manager groups are French

22% AuM of French asset managers are managed in vehicles domiciled abroad, principally in international hubs (predominantly Luxembourg and Ireland) and in foreign markets (e.g. US, Asian markets)

Investment fund population in the major centres in continental Europe(Number of domiciled CISs)

22% of assets under management of collective investment schemes domiciled in continental Europe are French

The French investment company (Société d’Investissement à Capital Variable, SICAV), an ideal solution for development on the international market

A range of supportive measures to transform FCPs intended for international markets into SICAVs

Fast market access

Among the most competitive operating costs in Europe

Strong governance rules

France is the #3 domicile of asset managers worldwide (source : IPE Q4 2019 Top 400)

7% 3% 3%3%

13%

17%

35%

19%

ItalySpain

DenmarkSweden

The Netherlands

Switzerland

France

France

Germany

Spain

Italy

The Netherlands

Austria

Germany

0 2,000 4,000 6,000 8,000 10,000

UCITS AIFs

UCITS AIFs

UCITS AIFs

UCITS

UCITS

UCITS

AIFs

AIFs

AIFs

7% 3% 3%3%

13%

17%

35%

19%

ItalySpain

DenmarkSweden

The Netherlands

Switzerland

France

France

Germany

Spain

Italy

The Netherlands

Austria

Germany

0 2,000 4,000 6,000 8,000 10,000

UCITS AIFs

UCITS AIFs

UCITS AIFs

UCITS

UCITS

UCITS

AIFs

AIFs

AIFs

2

Source: EFAMA, 3rd Quarter 2019


Number of domestic funds in the major continental European centres (Excluding hubs)

French domestic funds: Equity

Bond

Mixed

Money Market

Other

Over main European markets: Equity

Bond

Mixed

Money Market

Other

A market of 66 million consumers

The sixth strongest economy in the world

A major institutional market based on different categories of savings and insurance products

The first European market to authorise premarketing

THE LARGEST DOMESTIC MARKET FOR DISTRIBUTION OF INVESTMENT FUNDS AND ASSET MANAGEMENT MANDATES

10,000

10,0002,000

8,000

4,0000

France

Germany

Switzerland

Austria

Spain

Italy

3

Source: EFAMA

Number of French AMCs:

650+

Number of AMCs registered with

the BaFin:

379

Source: AFG (FR), BaFIN (DE)


An ecosystem consisting of 650+ Asset Management Companies (AMCs), 2/3 of which are entrepreneurial companies

Complete coverage of asset classes and balanced distribution of managed strategies

Great variety of management styles

93% of AMCs manage French funds, 23% of AMCs manage foreign funds and 45% of AMCs manage mandates

Close collaboration with academic research/Research Tax Incentives (research tax credit and sponsorship)

Capacity for innovation (multi-factor investing, smart beta, low carbon portfolios, Socially Responsible Investing (SRI), impact investing, private debt, etc.)

KNOW-HOW FOR INNOVATION IN ASSET MANAGEMENT UNRIVALLED IN EUROPE

Wide range of strategies of French CIS(Strategies and segments – in % of assets)

Source: AFG

Population and capabilities of French asset managers

20% 5.2%

11.8%

7.9%

6.9%

17.4%

3.2%

12%

9.7% 4.7%

8%

20.6% 18.4%

17%

Equities (18.4%) €291.1 bn France 1.5% Eurozone 6.9% European Union 2.1% International 7.9%

Bonds (17%) €269.4 bn Eurozone 11.8% International 5.2%

Alternative funds (1%)Structured funds (1.3%)Employee savings funds (8%)Private equity (4.7%) €125.5 bnReal estate (9.7%) €74.1 bnSecuritisation (12%) €153.9 bn

Balanced (20%) €315.8 bn

Money market (20.6%) €326.4 bn Short term / 3.2% Other / 17.4%

Source: AFG

Subsidiary AMCs Entrepreneurial AMCs

200 150 100 50 0 50 100 150 200 250250 300 350

Managers of French CISs

Managers of foreign CISs

Managers of mandates

Portfolio managers by type of strategy:

Equities

Bonds

Diversified

Money markets

Private equity

Real estate

Employee savings funds

Other

4


18%

11%

23%

48%

SRI mandatesand dedicated funds

SRI open-ended funds

ESG open-ended funds

ESG mandates and dedicated funds

Institutional Investors(incl. corporates)

Retail Banking

Employee Savings

Private Banking / Financial Advisers / Multi-Managers

38%

25%

11%

26%

2%

13%

31%

36%

18%

Others (Private Equity, Real Estate, Infrastructures…)

Diversified

Money Market Bonds incl. Corporate, Sovereign and Supranational

Listed Equities

Leading ESG European market

36% of the AuM managed in France in mandates or in funds are ESG

15% of the AuM managed in France in mandates or in funds are SRI

AMF, a regulator committed to sustainable finance

75% of SRI assets are invested by French institutional investors

LEADERSHIP IN SUSTAINABLE FINANCE

Leading European ESG market #1 EU ESG market, leadership in sustainable finance

25% Europe market share

466 French SRI labelled funds, amounting €194 Bn managed under SRI by 75 French asset managers (figures as at 2020.06.30)

41% of the French citizens feel concerned by sustainable finance (AMF)

In May 2019, three major French asset managers had, for each of them, two funds rewarded among the top 10 funds of the latest Climetrics Fund Award

In February 2020, French asset managers ranked top for 8 out of 15 funds. The top was headed by one of the major French asset managers.

A committed regulator to sustainable finance AMF has created a Climate and Sustainable Finance Commission

AMF has published and maintains a guidance for Socially Responsible Investment practices

Paris financial centre entities, including the French regulators ACPR and AMF provide a monitoring mechanism to assess the climate-related commitments

AMF supports ESMA’s advice on the integration of ESG risks and factors

AMF has published and maintains a Roadmap to sustainable finance

Principles for responsible investment, PRI France roadmap for sustainable finance, aiming at further strengthen French leadership

French Labels Greenfin label

SRI label

Finansol

French asset management ESG footprint

Distribution of SRI products

SRI Allocation

Source: AFG

5


France a business-friendly country, championing entrepreneurship and innovation

Europe’s most dynamic financial ecosystem

31 French groups in the Fortune Global 500

First continental European financial centre employment

Strong commitment to reinforce Paris’ position as the primary Financial Centre in the EU

COMPETITIVE POSITIONING CONFIRMED BY HIGH MARKS IN INTERNATIONAL RANKINGS

Attractiveness 1st European destination of innovation/R&D projects

1st European destination of manufacturing projects

1st European destination for Foreign Direct Investments (FDI) in 2019, growing 17% compared to 2018

Venture Capital Investment France is a Venture Capital Hub €4,5 Bn invested in French start-up’s in 2019, growing 48% compared to 2018

Real Estate Investment Paris to become the most attractive place in Europe for real estate investments, according to EY Attractiveness Survey Europe (June 2019)

Investments 1,450+ new foreign investors in France, growing 18% in 2019 compared to 2018

Innovation European Fintech leadership

More than 320 entrepreneurial Fintechs as at end of 2019 in all finance industry areas (payment, cash management, bank, insurance, Regtech, wealth management and investment, B2B services, blockchain, business funding, etc.)

France, 2d most innovative country (Online Education Barometer - OEB)

Strengthening and consolidation grow (+75% of projects with a duration > 3 years)

Fintech, crypto assets and Blockchain regulation in force (PACTE Law)

Source: Paris Europlace, France Fintech, EY, Emerging Trends in real Estate ® Europe, Financial Times, Shanghaï June 2020 Rankings.

6

Education Index HEC-Paris ranked 1st worldwide in the 2020 Financial Times Executive MBA ranking

HEC-Paris ranked 1st in the 2020 Financial Times European Business School ranking

The top-5 business schools ranked in the 2020 Financial Times Master in Finance are French

France is a more attractive place to study than US and UK, according to Kantar survey made on 14,000 students

Prestigious Shanghaï Ranking 2020: Toulouse School of Economics (TSE) 1st in Economy Paris-Saclay University 1st in Mathematics Montpellier University 2nd in Ecology 34 French High Schools & Universities distinguished


An integrated subscription/ redemption model (CSD) through Euroclear-France for investments made in France

Opening to the international markets through the registered intermediary mechanism and connection with the international distribution networks, including Luxembourg and Irish transfer agents (TAs)

EASY ACCESSIBILITY OF FRENCH FUNDS AND MANDATES TO FOREIGN INVESTORS

Complete catalogue of subscription/redemption solutionsSubscription/redemption from France:

Through a banking network

Through a wealth manager (“WMs”)

Through an online platform (dedicated or open architecture)

Through stock exchanges

Directly (institutional investors: insurance companies, mutual companies, large companies, other CISs, etc.)

Through an online Fintech/blockchain solution

Subscription/redemption from abroad:

Through a registered intermediary, such as a Luxembourg or Irish transfer agent

FRENCH INVESTOR

DEPOSITARY OF A FRENCH

CIS

INTERNATIONALINVESTOR

DEPOSITARY OF A FOREIGN

CIS

FINTECH/BLOCKCHAIN

FINTECH/BLOCKCHAIN

BANKING NETWORKS

ADVISORS (WMS), INTERMEDIARIES

PLATFORMS

STOCK EXCHANGES

INSTITUTIONAL

EUROCLEAR- FRANCE

BANKING NETWORKS

ADVISORS (WMS), INTERMEDIARIES

PLATFORMS, FINTECH

STOCK MARKET

INSTITUTIONAL

FOREIGN TRANSFER

AGENTS

CENTRALISING AGENT

7


A central location in Europe for the provision of quality services within the EU

An installation in one of the largest distribution markets

“Business friendly” market and regulator that welcome new stakeholders

A dedicated programme and strong tailored supportive measures for the relocation of activities to Paris

An efficient tax structure for foreign companies and a special tax regime for inpatriates

A DOMICILE OF CHOICE FOR THE PROVISION OF SERVICES TO OTHER EUROPEAN MARKETS

Number of asset management companies (AMCs) by provision of services(Number of AMCs in France and Germany according to investment category)

France Germany

AMCs managing domestic CIS

AMCs managing foreign CIS

AMCs managing mandates

Total number of AMCs

0 100 200 300 400 500 600 700

Source: AFG (FR)

Key positive hosting conditions for foreign providers Potential of the domestic market (Eurozone classification)

Accelerated procedure to obtain an AMC license

Time commitment (2 to 8 weeks)

Expertise of management companies

Supervision

Administration

Portfolio management

Marketing

European passport (EU/EEA)

Multi-disciplinary assistance and supportive measures to host foreign providers

Source: AMF, French regulation

8


New technologies: capacity for digital innovation, a new technologies ecosystem and population of Fintech projects

Blockchain: development of Blockchain technologies, a suitable regulatory framework and “Blockchain ready” regulator

A population of B2B and B2C distribution platforms

A fast-growing Robo-advisor market

High performing communication infrastructure

AT THE CUTTING EDGE OF FINTECH AND DIGITAL FINANCE

Development of FintechsThe French public bodies and Fintechs

Two departments dedicated to Fintechs at the AMF

Chief Digital Officer at the French Central Bank

Development of proof of concept based on blockchain by the French Central Bank

Project holders for assistance by both regulators and incubators

Official Fintech forum between French Treasury, French regulators, other French bodies and private stakeholders

Fintechs regulation and supervision

Several MoUs dedicated to Fintechs signed with several foreign authorities

France’s pionner laws to support Fintechs development Crowdfunding: comprehensive crowdfunding regulation regime Ordinance Blockchain: law allowing Blockchain technology in the framework of unlisted securities PACTE Bill: law dedicated to Initial Coin Offering (ICO) and Digital Asset Service Providers (DASP)

Diversity of French Fintechs

Regtech

Insuretech

Transfer/Forex

Crowdfunding/investment/lending

Aggregators

Mobile payment

Automated portfolio management

Automated investment advising (Robo-advisor)

Platforms based on blockchain

Crypto-asset exchanges

Crypto-custodians

Professional marketing platforms (B2B)

Public marketing platforms (B2C)

Source: AFG, AMF, French Central Bank, France Fintech (FR)

9

→ A dedicated Committee on Digital Innovations

→ Two working groups :

Regulatory Developments

Operational Digital Solutions

AFG is actively working on innovation


Availability and pro-activity with respect to new projects

Active participation in asset management dynamics (for example, the AMF-AFG FROG initiative)

Business friendly: commitment to fast track methods and procedures for the approval of new products and granting of new licences

Implementation of measures to facilitate the international development of French funds

Establishment of mutual recognition measures with strategic foreign jurisdictions

Blockchain ready regulator: Blockchain-appropriate regulations and procedures

Commitment to protect the end investor

A COMMITTED REGULATOR FOR THE DEVELOPMENT OF AN EFFICIENT AND COMPETITIVE FRENCH AND EUROPEAN REGULATORY FRAMEWORK

Visible commitments of regulators Department/team dedicated to development of the financial centre Fintech International projects

Proactive approach and assistance

Support to the asset management marketplace projects

All marketplace stakeholders dynamics

Simplified fast-track procedures Asset management company license Setup of CIS FCP - SICAV transformation

Fintech regulation & supervision Blockchain, crowdfunding technology, Initial Coin Offering (ICO) and Digital Asset Service Providers (DASP) ready regulator

The AMF plays an important role in European bodies

Pre-marketing regulation on the domestic market

Several MoUs with foreign authorities strengthening bilateral cooperation

Ability to identify and protect the end investor in case of default

Climate and Sustainable Finance CommissionSource: AFG, French Central Bank, France Fintech (FR)

10

Publication made by the AFG’s Europe and International DepartmentContact: Virginie Buey, Head of International PromotionTel.: +33 (0)1 44 94 96 66 | [email protected]

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AFG41, rue de la Bienfaisance 75008 Paris T : +33 (0)1 44 94 94 0045, rue de Trèves 1040 Bruxelles T : +32 (0)2 486 02 [email protected] www.afg.asso.fr

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