EU alt investment funds worth €4.9tr in 2017: ESMA

Alternative Investment Funds based in the EU was worth €4.9 trillion in 2017, as measured by Net Asset Value (NAV), according to The European Securities and Markets Authority (ESMA) first statistical report on the sector. That is nearly one third of the total EU fund industry.

The report is based on data from 26,378 AIFs, or 80 per cent of the market, and will be published annually.
Funds of Funds accounted for 16 percent of the industry, followed by Real Estate (RE) Funds (11 percent), Hedge Funds (5 percent) and Private Equity Funds (4 percent).

The remaining category of Other AIFs accounts for close to two-thirds of the industry (63 per cent), which highlights potential classification issues and therefore a more detailed analysis of this category will be carried out by ESMA. Most AIFs are sold to professional investors (81 per cent) but retail participation is significant (19 per cent), with the highest share in the Funds of Funds and Real Estate categories.
Steven Maijoor, ESMA Chair, said: “ESMA’s analysis of the data collected from AIFs, presented today, gives a first comprehensive overview of this important sector. The collection and analysis of data supports ESMA, and National Competent Authorities, in our work enhancing investor protection and promoting orderly and stable financial markets in the European Union.
“Our data analysis has highlighted some issues requiring further attention, including the issue of fund classification, while the liquidity mismatches identified in the Real Estate Funds sector, with its important share of retail investors, indicates potential risks for investors.
“This data will also support National Competent Authorities in their supervision of AIFs, and further strengthens supervisory convergence throughout the EU.”