Environmental, social and governance

Capture ESG Demand from Retail Investors in Europe

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Mark Horan

Mark Horan

Senior Account Manager, Europe

Retail Demand for ESG Hits New Highs

The retail sector’s total AUM across Europe-domiciled ESG mutual funds and ETFs stood at more than €1 trillion as of August 2020. In the four years through 2019, the sector’s assets grew at a CAGR of 17.1% and in the first eight months of 2020, they grew 11.0%.

Although the institutional segment remains a key opportunity for asset managers seeking to increase their presence in the European ESG market, the wealth management space also presents opportunities for product manufacturers to win business.

Investor Preferences

Retail investors favor sustainability-themed investment over other approaches. A key driver of ESG thematic funds’ popularity is their simplicity, which makes it easier for retail investors to understand them.

Distribution Options

64% of asset managers expect at least moderate demand across all retail distribution channels in every European market and private banks are expected to generate the most demand for responsible investment. This is the case across all retail markets in Europe. 87.5% of respondents expect high demand from investors with more than €5 million in wealth and 76.0% expect to see an increase in demand for ESG funds over the next 12 to 24 months.

Retail banks are the second-most-important distribution channel in four of the seven markets Cerulli surveyed.


Asset Managers' Level of Demand for Responsible Investments in Selected Retail Channels, 2020

ESG exhibit 1.06

Overcoming Challenges

Private banks, independent wealth managers (IWMs), and independent financial advisors (IFAs) clients see different factors as the key obstacles to investing in ESG funds. Private bank and IWM clients consider the lack of track record as the main barrier to investing in ESG funds, whereas IFA clients see the difficulty of benchmark ESG strategies as the main issue.

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Cerulli can help you evaluate addressability by channel, analyze pricing and fees, and build your ESG product development strategy. Connect with us to learn more about our capabilities.

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Meet the Team

Subject Matter Experts

André Schnurrenberger, CFA

André Schnurrenberger, CFA

Managing Director, Europe

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André Schnurrenberger, CFA

André Schnurrenberger, CFA

Managing Director, Europe

André Schnurrenberger is the managing director of EMEA for Cerulli Associates and leads all research, consulting, and business activities in the region. Since joining Cerulli Associates, André has focused on wider distribution and product trends across European asset managers and has worked with some of the largest global investment firms, reviewing their product shelves, enhancing their business models, and helping them define strategies for future growth.

Prior to joining Cerulli, André spent 7 years at Columbia Threadneedle Investments, most recently as head of Business Management and Market Intelligence & Research for EMEA Distribution, and before that as Head of Performance. He held previous roles at UBS Wealth Management in Zurich and London, including Head of Investment Analytics and Performance.

Full biography here.

Justina Deveikyte, CAIA

Justina Deveikyte, CAIA

Director

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Justina Deveikyte, CAIA

Justina Deveikyte, CAIA

Director

Justina joined Cerulli Associates in February 2014 and heads the European Institutional Asset Management research practice. In her role, she is responsible for all research activities relating to institutional investors, the firm’s analysis of alternative investments, the newly created environmental, social, governance (ESG) section, and all data-science-based activities. She also contributes to multiple strategic consulting engagements and The Cerulli Edge series.

Justina is the lead author of several Cerulli reports, covering insurance, retirement, ESG, and alternative investments. Throughout her career, she has successfully developed partnerships with industry associations and has presented at several conferences and events across the Europe.

Prior to joining Cerulli, Justina was a Financial Manager and Global Analyst at Global Food Consulting; she previously has provided professional advice on banking products, including unit-linked insurance and third-pillar pension products at SEB Bank Group.

Full biography here.

Andrius Dovydavicius

Andrius Dovydavicius

Senior Analyst

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Andrius Dovydavicius

Andrius Dovydavicius

Senior Analyst

Andrius specializes in European institutional distribution, with a focus on pensions. In an addition, he covers alternative investments including liquid alternatives, hedge funds, and private investments. His insights are often covered in several Cerulli publications—European reports and The Cerulli Edge series—and enrich strategic consulting engagements.

Full biography here.

Jakub Filonczuk

Jakub Filonczuk

Associate Analyst

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Jakub Filonczuk

Jakub Filonczuk

Associate Analyst

Jakub is an associate analyst on the Institutional Asset Management team. He provides quantitative and qualitative analysis for Cerulli’s European research products.

Previously, Jakub worked as a Research Analyst in the Data Quality & Analysis team at Citywire, a financial news publisher.

Full biography here.

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