PARIS, July 9 -- The number of funds domiciled in France has fallen steadily in recent years despite lobbying to attract more asset management business to the country following the upheaval caused by Brexit.
There were 10,804 funds domiciled in France at the end of last year, according to financial regulator the Autorité des Marchés Financiers, which used data from the European Fund and Asset Management Association. This was down from 11,790 at the beginning of 2012. The decline is striking given that Europe's other large fund jurisdictions — Luxembourg, Ireland, Germany and the UK — all registered increases. The news is a blow to France, which had hoped the UK's decision to leave the bloc would open the door to it becoming a larger hub for fund management. Paris's business district launched a quirky campaign shortly after the 2016 EU referendum to try to lure London-based financial workers across the Channel. The AMF attributed the fall to the transfer of funds to other jurisdictions, although it added that the total fund number had remained stable since 2017. "Delegation" rules allow funds to be domiciled in one part of the EU, with investment management activity taking place elsewhere. Large numbers of investment managers have established entities in Luxembourg and Ireland in preparation for Brexit.
Luxembourg is the biggest fund domicile in Europe with nearly 15,000 funds. France is the second-largest market while Ireland has overtaken Germany to claim third spot. It is not all bad news for France. A year ago BlackRock, the world's biggest asset manager, chose Paris over London for its new base to provide alternative investment services across Europe and Asia, although London remains its main European office. Part of the French campaign included French president Emmanuel Macron wooing Larry Fink, BlackRock chief executive, at the Elysée Palace. Other financial groups that have beefed up their presence in the French capital include US banks Citigroup and Bank of America.
Author: Lora Smith