A survey of global regulated fund managers in North America, Europe, Latin America and Asia reveals that the tumult following the global financial crisis has subsided and the industry is now firmly focused on growth. Representing approximately 30% of the total global assets under management in regulated funds, money managers polled in EY’s Global Regulated Funds Survey 2014 offer their views and actions on industry growth, product development, compensation approaches and future trends. The full report is available at www.ey.com/regulatedfunds

1. Driving growth and aligning interests:
EY’s Global Regulated Funds Survey 2014
A survey of global regulated fund managers in North America, Europe, Latin America and Asia reveals that
the tumult following the global financial crisis has subsided and the industry is now firmly focused on growth.
Representing approximately 30% of the total global assets under management in regulated funds, money managers
polled in EY’s Global Regulated Funds Survey 2014 offer their views and actions on industry growth, product
development, compensation approaches and future trends.
Industry growth
Regulated fund managers are targeting an average annual growth of 9% of net new money in the next five years,
though top approaches to achieving growth vary by region.
Annual growth of
net new money in
regulated funds over
the next five years:
Top approaches
to achieving
market growth:
10%
North
America
59%
of North
America
Increasing penetration of
existing markets and adding
distribution channels
10%
Europe
Increasing penetration of
existing markets and expanding
into new geographic markets
Products
primed for
growth:
80%
Solutions-based
products
Approaches to product development
50%
of Asia and Latin
America
Expanding their range of
product offerings
90%
Actively managed equity/fixed
income products
Demand from both institutional and retail clients is driving product development – not changes in the regulatory
environment. More than three-quarters of regulated fund managers have a department dedicated or assigned to
new product development.
Globally, fund managers
said their foremost focus
when developing new
products was investor
demand. As expected,
given the waves of recent
European regulation,
regulatory impact was the
top consideration for 27%
of Europe-based managers
compared to 5% or less for
North American and Asian
promoters.
Current investor demand 85%
83%
78%
Ability to grow AUM
Profitability 70%
Fund manager compensation
More than half of fund managers worldwide involve third parties
in the product development process, with North American
managers much more likely to do so. Globally, managers are
most likely to engage third parties for advisory services on:
Strategy
65%
Review of possible
tax implications
Managers are generally in the driver’s seat when determining their compensation.
In Europe, regulation is
driving change, and a
much higher proportion of
Europe-based managers
point to regulation as
having an impact on their
compensation structure.
Which factors play a primary role in fund manager compensation structures?
65%
33%
50%
30%
11%
38%
Internal decision
Market/competitor changes Regulatory and tax changes
North America Europe Asia and Latin America
Most managers employ multiple compensation models in their organizations.
5%
56%
13%
63%
Combination of
discretionary and
formula-based
24%
Discretionary
only
13%
Formula-based
only
Regulated funds industry: the next five years
61%
Legal
There is little doubt among fund managers that regulation will play the primary role in driving change for the
industry over the next five years, though there is no consensus around the possible impacts of regulatory changes.
12%
Accounting and
taxation
6%
Fees/profits
Biggest drivers of change: Possible impacts of regulatory changes:
79%
Regulatory
environment
24%
Changing
investor
demographics
14%
Shifts to
alternate
strategies/
demand for
new products
18%
Cross-border
issues
15%
Transparency
12%
Product-related
limitations
12%
Distribution
Global managers who are only “chasing the regulatory burden” will be restrained by their focus on what can and
can’t be done. Managers need to look beyond regulatory concerns to the factors driving growth and change in
the industry. Transparency, understanding client needs and goals, and developing new solutions that are aligned
with client interests will promote mutual success in the future.
The full report is available at ey.com/regulatedfunds.
© 2014 EYGM Limited. All Rights Reserved. EYG no: EH0180. ED None.
For the 33% of managers,
based in Europe, who
awarded bonuses entirely
on a discretionary basis,
changes will need to be
implemented as a result
of UCITS V.
64%
of Europe
7%
of Asia and Latin
America