Romanian Asset Management Overview
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Martie 2008 |
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CODRUŢ PASCU - Managing Partner
ROLAND BERGER STRATEGY CONSULTANTS |
Adresa
Strada Dr. Burghelea, Nr. 5
024031 Bucureşti, Sector 2
Telefon
+40-21-306.05.00
Fax
+40-21-306.05.10
Website
www.rolandberger.com
www.rolandberger.ro
CODRUŢ PASCU
Managing Partner
ROLAND BERGER STRATEGY CONSULTANTS S.R.L.
Less transparent than other financial services sectors and still under-developed, the asset management market is driven by the evolution of four segments: investment funds, insurance, pensions and banking. The development of these sectors is highly dependent on the country’s potential of wealth creation, the saving behavior of households and the corporate investment trend, which are supported by GDP and the stock market capitalization. The Romanian financial services industry is driven by general economic growth, increasing personal incomes and higher purchasing power. Industries such as construction, real estate and automotive are booming, fuelled by emerging middle class demand and in turn stimulating the financial sector (loans, leasing, life and non-life insurance). The economy overall has shown signs of positive development over the last few years and the trend is expected to continue; income per capita has risen sharply and the stock market capitalization increased seven times in the last five years.
Three major events left their mark on the development of the asset management sector in 2007: the opening of the private pensions third and second pillars, the heavy fluctuation of the local currency against the Euro after three years of constant appreciation, and the intensification of competition in all financial services sectors.
Recent developments in the Romanian asset management market
Investment funds
The Romanian investment funds market stands out as one of the least penetrated in the CEE region. With only EUR 13 investment per capita in 2007 Q2, Romania is far behind Poland (EUR 959) or Czech Republic (EUR 533).
Should the CAGR of net assets of investment funds in Romania over the last five years remain at the same level in the next period, it will not be fast enough to push the market to close the gap to CEE countries.
Poland succeeded in establishing an asset management industry; after 16 years of efforts (the first Polish mutual fund was launched in 1992) the sector is strong and confident. By comparison Romania as well as Czech Republic and Russia suffered from the damaging scandals that plagued the fund industries in their early years and still route the clients trust in other types of savings products.
In 2006, Poland had three times more funds than Romania, Hungary twice as many; Slovakia is the only country closer to our league. Since 2001, Romania doubled the number of funds and the net assets increased more than twenty times, but the penetration of net assets is still under 1% of GDP.
The Romanian investment fund market is currently open to funds registered abroad. The market supply includes both open-end investment funds, for which assets amounted to EUR 286 mn in 2007, and closed-end investment funds with assets reaching almost EUR 55 mn in 2007 (in case of closed-end investment fund data concerning entities not registered by the National Securities Commission is not available). The investment fund market in Romania is still underdeveloped – in 2006 net assets accounted for only 0.24% of GDP. Nevertheless, the market is expected to develop dynamically at ca. 90% p.a. and reach over EUR 3.5 bn in 2010. Product range is also expanding – in 2007 there were 41 open-end investment funds (compared to 32 in 2006), 7 closed-end investment funds registered by the National Securities Commission (5 in 2006) and 21 asset management companies1.
