Brexit outflows could put pressure on fund fees

Brexit money

Brexit outflows could place pressure on fees at asset managers, according to global analytics firm Cerulli Associates.

The research firm says it does not expect the UK’s vote to leave the EU will be a “game changer” for Europe’s asset management industry as it forecasts passporting rights will take a minimal hit.

The report says European-domiciled funds have seen net outflows of €32bn (£27.3bn) in the year to date, with mixed assets and commodities the only asset classes that posted net inflows, of €13.6bn and €700m respectively.

The report says Henderson Global Investors alone saw £940m outflows in the two weeks following Brexit.

It says: “The turmoil has led to something of a shakeout, and may intensify the pressure on fees.”

Cerulli Associates Europe managing director Barbara Wall says: “Most firms are not expecting the outflows, which admittedly were very large, to be magically reversed in the next month.

“However, they have already stabilised and most industry watchers expect the second half of the year to show a more positive trend.”

Cerulli says the fund groups worst affected by Brexit outflows will have to increase marketing efforts to convince previous investors to return and to find new investors.

Wall says passive funds are likely to be the biggest beneficiaries as the market returns to “some sort of normality”.