Survey reveals how 'UCITS' has translated into global business
opportunities for fund managers with innovative products and strong
LONDON, Sept. 8 /CNW/ - A report released today indicates that the
European regulatory initiative known as 'UCITS' has evolved into a "global
passport" opportunity for Canadian fund managers to achieve rapid, worldwide
growth in a cost-effective manner.
The report, titled, "Global Fund Distribution - Bridging New Frontiers",
shows that fund managers in the United States and Europe who have taken
advantage of UCITS have benefited from rapid product development, larger
client bases and operating leverage. The survey of 110 fund companies from 23
countries (representing $2.3 trillion in assets), was conducted by
London-based CREATE-Research and sponsored by RBC Dexia Investor Services.
Fund managers can expect continued growth, the report found.
Asset-weighted growth of UCITS registered funds is expected to increase at a
compound annual rate of 20% in Europe, 25% in Asia and Latin America, and 12%
"UCITS promoters have moved beyond their original goal of distributing
and selling robust, well-regulated investment funds to retail investors across
the European Union and are now widely distributed in regions such as Asia,
Latin America and Africa," said José Placido, Chief Executive Officer, RBC
Dexia. "Our research also indicates they hold broad and growing appeal to
"The UCITS framework presents a substantial global growth opportunity for
Canadian fund managers with a solid product offering and a track record of
performance," said Tony Johnson, Global Head of Sales and Relationship
Management at RBC Dexia. "To date, too few home-grown funds have reached
investors beyond Canada's borders. This global passport gives them the ability
to scale up, create strategic alliances and build their businesses globally at
UCITS is a series of European Union financial regulatory initiatives
dating to the mid-1980s, created to allow fund managers to operate across
borders within the European Union under the same set of rules and regulations.
According to the survey, the innovation and product development enabled
through UCITS registration has helped fund managers attract, retain, motivate
and deploy talent. Most of the innovation has been targeted at customising
existing products. 82% of fund managers name 'rapid product development' as a
key advantage to UCITS registration. As a result, retail investors in Europe
have almost four times as much choice of funds as those in the US.
The result is a net benefit for both fund managers and investors.
According to fund managers, the three main benefits for clients have been:
- Greater access to a range of trusted brands (64%).
- Greater transparency in investment strategies (62%).
- More customised solutions for clients (60%).
Despite the obvious benefits of registration, the report found many fund
managers outside the EU have not yet registered under the UCITS regime. The
most common reasons fund managers cite for not registering include:
- Lack of familiarity with UCITS.
- Deliberate focus on their domestic markets, which are perceived as
- Difficulty in finding alliance partners.
- Perception of onerous regulation both inside and outside Europe.
- Difficulty making contacts in diverse linguistic and cultural
The report also pointed to the emergence of third-party administrators as
helping to enable Canadian fund managers to compete effectively with the
larger players for the global investment dollar. "The report highlights the
need for fund managers to focus on their core competencies in manufacturing,
while outsourcing non-core activities to third-party administrators and
distributors, enabling the growth of the business and client service, while
removing systemic inefficiencies in the industry," said Amin Rajan, CEO of
CREATE-Research and author of the report.
To download a copy of the 'Global Fund Distribution - Bridging New
Frontiers' go to:
About RBC Dexia Investor Services
RBC Dexia Investor Services offers a complete range of investor services
to institutions worldwide. Our unique offshore and onshore solutions, combined
with the expertise of our 5,200 professionals in 16 markets, help clients grow
their business and sustain enhanced performance through efficiency
improvements and robust risk management processes. Equally-owned by RBC and
Dexia, the company ranks among the world's top 10 global custodians with USD
2.8 trillion in client assets under administration. rbcdexia.com
CREATE-Research is an independent research centre, specialising in future
trends in global investment management. Its research reports are widely used
by decision makers on the buy-side as well as the sell-side.
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