Europe Fixed Income Assets Management Industry | Growth, Trends, COVID-19 Impact, and Forecasts (2022-2027)

Europe Fixed Income Assets Management Industry is Segmented by Source of Funds (Pension Funds and Insurance Companies, Retail Investors, Institutional Investors, Government/Sovereign Wealth Fund, and Other Sources of Funds), Type of Asset Management Firms (Large Financial Institutions/Bulge Bracket Banks, Mutual Fund ETFs, Private Equity and Venture Capital, Fixed Income Funds, Managed Pension Funds, and Other Types of Asset Management Firms), and Country.

Market Snapshot

europe fixed income assets management industry
Study Period: 2018-2027
Base Year: 2021
CAGR: 1.2 %

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Market Overview

Portfolio allocations to fixed income are primarily driven by investors' expectations of returns, followed by volatility concerns and liquidity requirements. Within core European fixed incomes, investment-grade corporate bonds are primarily used to deliver returns, while lower-yielding sovereign debt has a more operative function of liquidity and duration-matching. Non-core fixed income classes such as global high yield and emerging market debt are expected to deliver the strongest overall performance. Conversely, reflecting the return expectations noted above, global high yield and emerging market debt are sought-after sources of total return and yield generation.

European institutions are allocating, on average, 56% of their portfolios to fixed income and twice their allocation to equity. Two-thirds of European institutions manage their fixed income on a wholly active basis. However, there is a growing minority looking to manage core assets such as domestic government bonds passively, primarily using index funds. Half of the European institutions have a fixed income portfolio duration of five to ten years.

The COVID-19 pandemic shone a spotlight on the need to continue technological modernization at every level of the investment management delivery chain in order to deliver the best outcomes for customers. The operating model is also increasingly focused on the importance of the Diversity and Inclusion (D&I) agenda.

Scope of the Report

The scope of the report covers an understanding of the European fixed income assets management industry, regulatory environment, asset managers, and their business models, along with detailed market segmentation, product types, current market trends, changes in market dynamics, and growth opportunities. An in-depth analysis of the market size and forecast for the various segments has also been covered.

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Key Market Trends

Green Bonds in Europe Driving the Market

Europe is a world leader in the issuance of green bonds, with a total issuance of USD 265 billion in green bonds in 2021. Germany issued, by far, the largest amount of green bonds in Europe, amounting to over USD 63 billion. Since the European Investment Bank inaugurated the green bond market in 2007 with its Climate Awareness Bond, the market has grown very fast, but it still represents only about 3 to 3.5% of overall bond issuance. The green bond market needs to grow more quickly to achieve the targets of the Paris Agreement. The Commission's proposal aims to establish an official EU standard for green bonds aligned with the EU taxonomy for sustainable activities, based on a registration system and supervisory framework for external reviewers of European green bonds.

europe fixed income assets management industry share

Bond Market in United Kingdom Aiding Market Growth

The bond market has seen considerable increases in overseas allocation from 42% of total assets in 2017 to 55% in 2020. UK gilts and non-gilts (primarily made up of corporate bonds) outperformed global bonds, returning 9% and 8%, respectively. Growth in allocation to overseas bonds coincided with the United Kingdom’s decision to exit the European Union. Total investments across UK equities, sterling corporate bonds, UK infrastructure, and commercial property stood at EUR 1.7 trillion in 2020.

europe fixed income assets management industry growth

Competitive Landscape

The report includes an overview of asset managers operating across Europe or in one or a few countries within the region. The report covers detailed profiling of a few major companies, including their product offerings, regulations governing them, their headquarters, and financial performance. Some of the major players currently dominating the market are listed below.

Recent Developments

· In December 2021, Amundi and Societe Generale announced the completion of the acquisition of Lyxor by Amundi from Societe Generale. Lyxor is one of the key players in the ETF market in Europe and has developed recognized expertise in active management, in particular, through its leading liquid alternative platform.

· In April 2020, PIMCO, one of the world’s premier fixed income investment managers, integrated its European UCITS ETF business with its global ETF platform. As part of the integration, PIMCO and Invesco ceased their European distribution partnership as of June 12, 2020.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS AND DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Insights into ESG Investing and Green Bonds

    3. 4.3 Technology Role in Client Relationship Management and In Way of Doing Business

    4. 4.4 Industry Policies and Government Regulations

    5. 4.5 Market Drivers

    6. 4.6 Market Restraints

    7. 4.7 Value Chain/Supply Chain Analysis

    8. 4.8 Porter's Five Forces Analysis

      1. 4.8.1 Threat of New Entrants

      2. 4.8.2 Bargaining Power of Buyers/Consumers

      3. 4.8.3 Bargaining Power of Suppliers

      4. 4.8.4 Threat of Substitute Products

      5. 4.8.5 Intensity of Competitive Rivalry

    9. 4.9 Impact of COVID-19 on the Market

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Source of Funds

      1. 5.1.1 Pension Funds and Insurance Companies

      2. 5.1.2 Retail Investors

      3. 5.1.3 Institutional Investors

      4. 5.1.4 Government/Sovereign Wealth Fund

      5. 5.1.5 Other Sources of Funds

    2. 5.2 Type of Asset Management Firms

      1. 5.2.1 Large Financial Institutions/Bulge Bracket Banks

      2. 5.2.2 Mutual Fund ETFs

      3. 5.2.3 Private Equity and Venture Capital

      4. 5.2.4 Fixed Income Funds

      5. 5.2.5 Managed Pension Funds

      6. 5.2.6 Other Types of Asset Management Firms

    3. 5.3 By Country

      1. 5.3.1 United Kingdom

      2. 5.3.2 France

      3. 5.3.3 Germany

      4. 5.3.4 Switzerland

      5. 5.3.5 Netherlands

      6. 5.3.6 Italy

      7. 5.3.7 Rest of Europe

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Competition Overview (Market Concentration and M&A Deals)

    2. 6.2 Company Profiles

      1. 6.2.1 Legal & General Investment Management

      2. 6.2.2 JP Morgan

      3. 6.2.3 Franklin Templeton

      4. 6.2.4 BlackRock

      5. 6.2.5 Insight Investment

      6. 6.2.6 APG

      7. 6.2.7 Amundi Investment

      8. 6.2.8 State Street Global Advisors

      9. 6.2.9 Goldman Sachs

      10. 6.2.10 PIMCO*

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Europe Fixed income Assets Management Industry market is studied from 2018 - 2027.

The Europe Fixed income Assets Management Industry is growing at a CAGR of 1.2% over the next 5 years.

Legal & General Investment Management Limited, PIMCO, Franklin Templeton Inc, Amundi Investment, Insight Investment are the major companies operating in Europe Fixed income Assets Management Industry.

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