In total, 2,749 funds were created across the continent last year, though this was offset against 2,028 funds being liquidated – the net number of new funds therefore fell by 722.
You would be forgiven for feeling a sense of déjà vu as a similar release last year reported that 2,872 funds were launched in 2010, the lowest since 2006.
Back in February, Lipper was moved to dismiss claims of a new dawn in product rationalisation, pointing out that the industry has grown by 74% over the past ten years, with nearly half of industry assets (46%) in funds launched over the past decade.
Today, the firm said 2011 was a period of focus on consolidation of available fund ranges offered by fund houses in response to EU-passport policies – 1,433 funds were merged during the year.
Joint authors of the report, Christoph Karg and Detlef Glow, stressed that Ucits IV regulation led to huge administrative efforts for all fund groups.
This includes requirements to set up KIIDs for all products to replace existing simplified sales prospectuses and the demand to distinguish real money market products from products with a similar targeted performance but different underlying securities.
As previously discussed in Portfolio Adviser, a cut in available products should not necessarily be viewed as a sign of a sick industry, while there are still plenty of opportunities for groups to move away from ‘me too’ funds towards more innovative launches.