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Providers of asset management services

What fundamental differences are there in asset management?

The first step is to analyse whether asset management is provided exclusively for one client/ investor and whether there is also a close legal relationship (captive asset management) or whether the asset management companies operate as independent service companies for various customers (non-captive asset management). In practice, there are also very frequently hybrid forms involving various combinations. Some companies who have provided input for this brochure provide in-house services for their company and also simultaneously offer external asset management services. For the sake of simplicity, the following section will speak only of asset management, referring only to non-captive asset management.

 

How many companies offer their services in asset management?

We can assume that more than 50 asset management companies offer their services in Germany.

 

Is there a market overview?

Bell Management Consultants have been publishing the asset management report (AMR) every year since 2010. The aim of the AMR is to introduce more transparency into the market. It AMR provides a comprehensive overview of the asset management companies operating on the market, together with their fundamental data and business models. It also includes market developments and market potential. The number of participating companies has been constantly increasing in recent years. The AMR is now firmly established at potential clients.

 

In the following, we have set out various extracts taken from the most recent asset management report. It is based on the data of 36 asset management companies in Germany. Accordingly, the overall volume of the asset management companies comprises approximately € 117 billion assets under management (AuM). Of this figure, the companies of the Asset Management Excellence initiative are responsible for managing approximately € 28.4 billion AuM. The market of asset management providers is overall characterised by significant differences in terms of company size. On the market, there are also many mid-size and small asset managers employing fewer than 25 employees.

How are the AuM distributed over the individual asset classes?

Of the AuM figures reported by the participating asset managers, 31 % (€ 36 billion) are attributable to the asset class Shopping centre/retail park. The leader in this particular field, namely ECE Projetmanagement GmbH & Co. KG, accounts for € 26 billion. The asset class Office is in second place, accounting for 25 % (€ 29.7 billion).

How many asset classes are covered by the individual service providers?

On the market, asset management companies generally offer their competence in several asset classes. However, most asset managers focus on one to three asset classes.

 

What will be the future development of the market of asset management service providers? Most of the companies questioned in the asset management report (approximately 77 %) expect to see further growth reported for the sector. However, the expectation of growth has fallen from 93 % since 2011.

5 % Logistics

11 % Other retail

13 % Residential

15 % Other (incl. Hotel, Multi-storey car park, Retirement/nursing home)

25 % Office

31 % Shopping centre/retail park

Aggregate distribution of all AuM over the asset classes

Source: Asset Management Report 2014, Bell Management Consultants BMC

With this evaluation, it has to be borne in mind that the relatively high percentage in the shopping centre cluster is mainly attributable to two participating companies in the AMR.


The demand side

The customers of asset managers include national and international investors as well as institutions and family offices. International customers account for approximately 41 % of the overall market, measured in terms of AuM in €. The distribution of national customers is as follows: domestic institutional investors (approx. 32 %), banks (approx. 18 %) and private investors (7 %). Corporates at present account for only approximately 1.4 %. So far, there have hardly been any orders placed by the public sector.

 

In recent years, there has been a shift in the significance of individual target customers for asset managers. Attention now focusses to a greater extent on the groups of domestic investors and private investors.

1.4 % Corporates

7.3 % Domestic private investors

18.3 % Banks

31.7 % Domestic institutional investors

41.3 % International investors

Diagram: Distribution AuM in % of customer groups

Source: Asset Management Report 2014, Bell Management Consultants BMC


We need to consider the question as to why external asset management is at all an interesting subject, and also what are the crucial arguments for an order being placed. The potential customers can be classified in three groups: international investors who do not operate their own platform in Germany use the services offered by asset managers. However, customers also include domestic investors who do not meet the criterion of a specific size and for whom an inhouse asset management function is not an attractive solution. Flexibility and speed are some of the major advantages offered by external asset managers. However, investors with their own in-house asset management function can also consider whether an outsourcing arrangement might not offer strategic and financial benefits (possibly also only in relation to individual assets). It is also possible for sub-elements of services to be outsourced.