Fund Launch Data Indicates Recovery (Of Sorts) for Managers

The mutual fund universe could begin to expand again from next year, according to Lipper.

Mutual fund launches in the first half of 2014 exceeded 1,000 for the first time in three years, while the number of funds closing or merging has fallen to a five-year low, according to Lipper.

The fund research house found that 518 new funds were launched across Europe in the second quarter, the highest level for Q2 numbers since 2011. It brought the total launches in the first six months of the year to 1,059.

A total of 1,359 funds were either liquidated or merged away in the same six-month period, Lipper data showed—the lowest figure in five years of data from the company. The number of closures has exceeded the number for launches in the first half of each of the last three years as a wave of new asset management rules—coupled with macroeconomic uncertainty—has put pressure on costs for fund managers.

However, Detlef Glow, head of Lipper EMEA research, said the difference between closures and launches had narrowed in the past three years, indicating that the number of funds registered for sale in Europe—currently 31,942, according to the data provider—could begin to expand again in 2015 after a period of consolidation.

Glow said tensions between Ukraine, Russia, and the European Union may have suppressed product launches in recent months, and cited the Alternative Investment Fund Managers Directive (AIFMD) as another key regulatory concern for providers.

“With the AIFMD gone live on July 22, both fund management companies and regulators are pushed to ensure the corresponding applications have been submitted,” Glow said.

“Since, during the first phase of new regulations, they are in some cases a hindrance for the launch of new products, the introduction of AIFMD might have had a negative impact on the launch activity of fund promoters during the first half of 2014.”

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