Point of rules common to the whole of Europe

With this report on the industry of asset management, Invesco takes part once again in the European debate. Its Director General, Jean-Baptiste de Franssu, explains his approach.

This is not the first time that you intervene in the European debate on management...

Historically, we we are always expressed on the subjects of the profession including at the local level in France on the map of canvassing or through initiatives such as our contribution to the Ofgri, which annually gives a panoramic view of institutional management. There is a little more than two years, we have brought together experts to reflect on the conditions for a better future for the management in Europe. A year ago, our group has published a report on cross-border mergers of investment funds. The conclusions concerned the European Commission, including the Group of experts on the efficiency of the European management industry since the latter has made one of the five recommendations in its report released in July.

Why return you while on the topic of cross-border mergers

Today, we go further. The drafting of a new directive on the management and its transposition in the different Member States will require between five and seven years. We cannot expect this deadline without doing anything. This is why we advocate in this new report that the authorities and professional associations are working constructively to facilitate cross-border mergers of investment fund. Point of rules common to the whole of Europe. Rather research of bilateral arrangements between different countries. If we want to compete with the US mutual fund, we quickly streamline our lines.

In Europe, there are 31,000 Fund, then the United States did in comptent than 8,000 for a higher overall outstanding. Some institutions have until eleven homes for the same type of funds! Mergers would allow, in addition to the Elimination of duplications, sensitive and, therefore, savings to reduce costs for customers. Two solutions are possible and have been used by some players in some homes: home of a Fund, or followed the change of a domestic merger, is what we call the "scheme of amalgamation".

This last concept is anglo-saxon, but easily transposable in our law. It's operations by which the assets of a Fund in a home are made to other funds in another residence, in return for the last fund securities which are finally redistributed to the initial carrier. It is a complex appearance, but in the end quite simple, which has the merit to involve a single controller instead of two. It remains however constrained in the country of fusion to the possibility of subscriptions by contribution in kind.

Do you not fear opposition from regulators who seek to preserve a local management industry

Regulators should not focus on domiciliation funds in fact the place of administration of the Fund which was only one of the elements of the chain of value of the asset management. Not outsourcing of management activities lead to the change of the domicile of the Fund. For example, we were able to transfer funds from Irish law to the Luxembourg, so that the activities of management, marketing and other support functions remained in the same place. Unfortunately, the opposite, i.e. the redomiciliation of the Luxembourg to the Ireland is not possible. It therefore relax the rules and speed up the process. Today, a merger by redomiciliation can take up to eighteen months, after the convening of general meetings of unitholders of decade and countless trips with the different authorities.