Weekly Fund Distribution Notes – 22 April 2025
27th May 2025

The awakening of active in spite of record ETF Q1 flows globally? European fund selectors on team culture, evergreen valuations and US debt and interest rate cuts. Also, the analogy of pro surfing and outstanding success in European fund distribution.

Let’s kick off with some buy-side news and insights. In terms of mandates, Schroder scooped a EUR 2.5 billion insurance mandate by Scottish Friendly, one of the UK’s largest mutual life insurance companies. The mandate, “a clearer selection of competitively priced funds”, follows Scottish Friendly’s decision to simplify its product offering as part of its unit-linked fund rationalisation project, as reported by IPE and Ignites Europe.

Citywire Selector featured some selector videos from its Lisbon MAGA – “Make Active (Investing) Great Again” panel discussion. This featured Ana Gomes, senior investment adviser and fund selector at Novo Banco, Tiago Gaspar, fund selector at Banco Chargers, as well as Eduardo Monteiro, head of discretionary portfolio management at BPI Gestão de Ativos (CaixaBank group), discussing the potential active awakening and potential alpha sweet spots. Anyway, cheap beta has made sense and worked for many investors. However, times have certainly changed. In our chart of the week below, we show the best and worst-selling fund categories in Europe last month – broken down into active and passive. Nevertheless, March data almost reflects on an “old” world.  April flows will show us more in terms of changing tides in the “new” world. Stay tuned. 

Citywire also featured an interview with Cameron Falconer, head of manager research at Aviva Investors, on why team culture and improvement culture are pivotal for him in fund / manager selection. “Selectors should go well beyond liaising with lead managers on funds. I really encourage the team to go and speak to analysts.” In another Citywire feature, LGT selector Oyvin Furustol addressed whether monthly evergreen valuations make sense. Well, not for him. “Monthly valuations are incompatible with illiquid investments. I don’t find transparency better with evergreen funds. The industry is going in the wrong direction if the goal is to evaluate private companies monthly.” 

Phil Gschwend, senior portfolio manager at ZKB, agreed that transparency was a challenge in these vehicles and that due diligence can be harder than for conventional drawdown funds. However, he also added that he likes the liquidity features paired with private equity-like returns available in evergreen vehicles. This was echoed by Fiona Kenyon, head of private markets advisers at Julius Baer. “I like the immediate exposure to private markets that evergreens offer, without playing the waiting game of a portfolio being seeded.” 

Another Citywire article addressed viewpoints from more than 100 European fund selectors at recent Citywire events in Lisbon, Madrid, Bellagio and Dublin on US debt and interest rate cuts. See link section below. Finishing with selector news, Jean-Philippe Muge, head of fund selection at Cyrus, announced last Thursday that he was leaving the group after 12 years. 

What else? On Sunday, while watching the sea, I posted a surfer / fund distribution analogy on LinkedIn (Link). Moving ahead of the pack, catching the right waves requires guts, determination, focus and precision. There is no point in trying to surf all the waves. It is about making clear choices. 

In fact, it is very similar to outstanding success in fund distribution. Regardless of how many resources an asset manager may put into play, there is no way to chase all alleged opportunities at the same time. It is about bold decision making, rigorous focus and knowing what it really takes – and saying no. Just because everybody tries to surf a certain wave does not mean it is the smartest move. Let’s talk!

Just to avoid any confusion, I am not a surfer (anymore), but rather an all-year swimmer. Hence, we have our beach apartment in a bay where the sea tends to be very quiet with almost Caribbean colour reflections (see cover shot above taken on Saturday).

Last but not least, I am already excited about writing our bi-annual European Fund Distribution Landscape Report. Exciting times. Lots of money in motion. I am even tempted to bring out a client-only assessment of the first four months this May. No promises, but stay tuned!