Almost two-thirds of those taking part in the study, conducted on behalf of the Fund Platform Group, said that the number of funds in Europe would fall by at least 10% by the end of the year. One fifth anticipates the figure being between 20% and 30%.
Cost concerns, challenging market conditions and the administrative burden of preparing for Ucits have forced some fund managers to reduce their offerings. An average 1743 funds closed each year between 2008 and 2012.
Concentration of capital is also anticipated; 67% of fund platforms and 60% of fund managers expect over 60% of capital to be held by ten fund managers by 2015. However, just one-third of fund buyers share this view.
Participants in the study included fund buyers and sellers, fund platforms and trade associations and bodies.
Yoon NG, Associate Director of Cerulli Associates said: "Since the financial crisis we have seen a herd mentality from fund buyers in Europe, with the majority of capital flowing into a select few products. Despite the variety available in open architecture, fund buyers have leaned toward bigger brands and larger funds.
"Consolidation of capital is likely to worsen which raises questions regarding sustainability for the majority of funds. Fund launches are likely to be more cautious and managers will be considering fund rationalisation, though the cost and effort involved in the latter could act as a huge impediment."
Despite the difficulties predicted in the European market, fund platforms will be able to take advantage of opportunities in other markets. Edouard Bokuetenge, chairman of the Fund Platform Group, said: “Platforms remain upbeat about their growth prospects, with the research pinpointing non-domestic European markets and Asia as the primary sources of new opportunities in the near term.”
