The survey from the group said that accessing investors in international markets is considered one of the main barriers, expertise and cost are others that hold them back.

A survey of boutique asset managers – those with no more than €20 billion ($22.08 billion) in assets under management – showed that 55 per cent of them plan to expand internationally, particularly in Europe. Luxembourg is the favoured fund domicile, the survey, from Universal Investment, showed.

Although international expansion is a goal, many businesses face “significant hurdles,” including limited familiarity with local markets as a foundation for working internationally, the fund services platform and European management company (“Super ManCo”), said. (This publication interviewed the organisation last year.)

The survey, which drew replies between 6 May and 7 June, was conducted alongside UI efa and Alumia.

Some 71 per cent of boutique asset managers said they aim to reach new investors by launching equities strategies outside their home market in the next 12 to 24 months. Similarly, an equal proportion plans to introduce alternative investment strategies, such as private equity, private debt or infrastructure.

The primary geographic focus for international expansion is continental Europe, as indicated by 65 per cent of managers. German- and French-speaking countries are top targets, with 24 per cent and 18 per cent of boutiques respectively naming them as key markets for growth over the next one to two years. 

Asked about their preferred fund domicile, 40 per cent of respondents chose Luxembourg.

To market these funds, all managers surveyed favour regulated fund structures, particularly UCITS and the alternative investment fund (AIF) model, named by nearly 70 per cent and 19 per cent, respectively.

“European assets under management reached €29 trillion in 2023, highlighting the region’s highly attractive growth potential, with 70 per cent of managed assets coming from asset owners.

Luxembourg and Ireland, now the largest global fund domiciles outside of the US, provide excellent access to the vast pool of institutional capital in Europe. "We continue to see strong growth in both locations,” Marcus Kuntz, head of sales and fund distribution at Universal Investment, said.

Obstacles
Despite the growth potential, two-thirds (67 per cent) of asset managers consider limited familiarity in dealing with international markets, for example local regulations, as the major barrier to expansion. 

Among those already operating internationally, 40 per cent struggle with attracting potential investors. Only 10 per cent have a robust network in jurisdictions outside their home market, which encourages managers to adopt third-party service providers for fund marketing and distribution support. 

Universal Investment, founded in former West Germany in 1958, has around €1.142 trillion in assets under management and about 5,000 fund and investment mandates, with staff in Frankfurt am Main, Luxembourg, Dublin, London, Paris, Stockholm and Krakow.