Page 12 - European investment_preview

THE EUROPEAN INVESTMENT FUND MANAGEMENT INDUSTRY
tect participants from ensuring the system’s stability and the financial markets’ func- tioning.
The regulation’s expansion partly coincides with current States’ tendency to inter- vene as market “regulators”. States intervene in economic life in a way that differs from the previous “liberal” States, which essentially dictated rules in criminal law and regulated relations between private individuals.
Although examples of asset management products, in one form or another, have been around for a long time, it is only in the last few decades that a proper financial market and new financial products, such as managed accounts and investment funds, have developed in Europe. These are the years in which, fortunately, some of the most important European regulations have been envisaged. These have allowed in- vestors to obtain protection and safeguard their investments, creating products that have become worldwide brands, such as the Undertakings for Collective Invest- ments in Transferable Securities (UCITS) and the Alternative Investment Funds (AIFs) that we will discuss at length in this volume. In terms of products, the market is also growing considerably. In fact, since 2008, UCITS and AIFs have experienced remarkable growth rates in assets under management, rising from EUR 4,477 bl and EUR 1,637 bl in 2008 to EUR 12,063 bl and EUR 7,360 bl, respectively, in 20222. The transition from a loosely regulated market to a highly regulated one has certain- ly not been easy and not without criticism; many argue that the investment market is, as of nowadays, filled with ever-evolving rules and regulations, the costs of which often end up falling on the investors themselves. Nevertheless, it is undeniable that the work done by the regulators is definitely in the right direction. Perhaps we will see a simplification of some regulations once the market has adjusted to specific cul- tural and behavioural standards that must be fundamental to investor protection. The regulation has enabled the asset management sector to become a credible indus- try, thanks to the willingness of national authorities and, in Europe, the European Community, to regulate this industry while closely monitoring its evolution.
The phenomenon that I find very interesting and, in some ways, surprising is that some products, born thanks to the vision of the European Community, such as UCITS, have managed to become recognised brands not only in Europe, but also in America and Asia. The same, albeit with different dynamics, is happening with AIFs, which are enjoying great success worldwide.
Over 12 years ago, I decided to move my main work base to Luxembourg to experi- ence the development of the asset management industry first-hand. I had been fre- quenting the Grand Duchy assiduously since the late 1990s. I had become aware of the transformation that was taking place in the country, which had focused heavily on the investment fund industry. The country’s system had all players’ support while respecting their roles, which had a considerable multiplier effect.
2 Reprocessing of data provided by EFAMA in their Quarterly Statistical Reports from 2008 to 2022 for both UCITS Funds and Alternative Investment Funds.
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