Weekly Fund Distribution Notes – 29 July 2025
16th October 2025
Few winners take it all in a number of fund categories and when it comes to current product hypes like evergreen funds and active ETFs. Also, some fund selector news and private equity firms flipping assets to themselves via so-called continuation funds in record numbers. Last but not least, concerns on current US valuation levels, the overall “euphoria” and bubble fears are mounting.
What’s the news from the buy-side? Here in sunny Spain, fund selector Natali Giocheva Gigova has left Santander AM to join the independent advisory portfolio team within the group’s private banking arm, focusing on alternatives and illiquid investments. Back in spring, Santander AM selector Juan Luis Luengo already transitioned to an advisory portfolio management role at Santander PB, stepping away from fund selection. Up in Dublin, Axa IM Select fund selector Jacopo Tassara left the firm and joined Fineco AM as a structured solutions portfolio manager.
We are in the heyday of the production of the next Biannual European Fund Distribution Landscape Report to be released next week. As always, we go beyond the obvious, as fund flows are much more heterogeneous than headline/category numbers suggest. Identifying the outliers, which in a number of cases carried almost all flows within a fund category (see our chart of the week below), as well as understanding current tier one fund buyer allocations and views, is vital to draw the right conclusions. The same applies to careful data curation. The report will feature some important data corrections. In consequence, some of our numbers may differ from some media and peer reports.
Also, and very importantly, the report will not shy away from taking a critical view – with evidence of course – on current hypes whilst also highlighting specific opportunities. Just because everybody talks the same talk, it does not necessarily mean that it is true or a good idea. The veterans amongst us have seen it before. Not once, nor twice, but literally every time the majority of the industry jumped on certain product hypes, such as evergreens or active ETFs these days. As mentioned before, we also highlight the opportunities. There are and will be winners, but significantly fewer than widely assumed. For evergreens, broader lack of demand, too many entries / new comers and liquidity concerns remain as prominent barriers. Citywire Selector quoted Klarphos’ Daniel Gomez Leyva yesterday as saying that “there is a strong emphasis on those who have proven their mettle during previous cycles. Selectors need to go beyond those who are adept at creation and origination but consider those that have been stress-tested.”
It is very much a winner-take-all environment, even though some, but only some, will catch up. In this context, it is not overly surprising that Blackstone reported a massive growth in evergreen fee related performance revenues by 167% compared with the same period last year. Overall fee related earnings jumped 31% to USD 1.5 billion in Q2. Within the private wealth channel alone, assets now amount to USD 280 billion. Overall AuM grew to USD 1.2 trillion (up 13%).
Talking private assets, the Financial Times reported last week that private equity firms flip assets to themselves in record numbers via so-called continuation funds. It’s a practice which has been raising eyebrows for some time now. See link section below.
What else? Whilst the environment and views on the US as the safe haven have undeniably changed in Europe, the US economy has proven once more to be remarkably resilient. Stock markets reached new record highs, inflation remains modest and unemployment is low. However, pressure on the dollar changed the outcome for European investors significantly. Anyway, concerns on current valuation levels, the overall “euphoria” and bubble fears are mounting. The Financial Times quoted Dan Ivascyn, Pimco’s CIO, on Friday as stating that “I think you’re beginning to see perhaps some very early parallels to what you saw back with the internet boom in the late 90s, early 2000s. There’s this lottery ticket mentality that tends to exist. It’s a dangerous set up.” Rob Arnott, founder and chair of Research Affiliates, added that “across the S&P, price to sales, price to cash flow, price to book, price to dividends, they’re all near record levels.” Analysts at Deutsche Bank questioned in a note on Thursday whether a rise in borrowing to fund stock purchases was a sign of the “hottest euphoria” since 1999 and 2007. Oh well …
