The targets of our survey have been, as in the past, European institutions that already employ sub-advisers, as they have a greater understanding of the topic. They gave valuable insights into the trends and developments of this activity.
To understand the key barriers to sub-advisory and potential growth, we also questioned a few institutions that currently prefer to distribute off-the-shelf third-party funds. This exercise gave us insights into an alternative model of sub-advisory, which takes place when a distributor, which often can count on a sizeable distribution network, wants to launch a bespoke product to meet client needs but does not have the fund infrastructure.
In this case, they can ask a specific manager to add that new fund to the manager’s Ucits’ family, often promising the manager a certain asset flow to make it a viable solution. This is for example the strategy adopted by UniCredit Private Bank with some of its strategic partners.
This hybrid form of sub-advisory is quicker and hassle-free, as the work falls on the asset manager to launch and seed the product and go through the regulation process rather than the organisation doing the distribution. Like the pure sub-advisory model, it offers the possibility to gain access to a specific manager that does not have a presence in Europe (see SEB Wealth Management p13).
The tables below summarise some key results, but refer to the traditional model of sub-advisory, executed through segregated mandates.
Click on the countries/regions to see the tables:
