Romania’s asset management industry has entered a phase of accelerated maturity after surpassing the threshold of one million investors, and prospects show there is still significant growth potential, according to participants of the 7th edition of the Summit of the Romanian Fund Managers Association.
Asset managers across Romania, reunited at the Summit, highlighted that the growth of incomes, digitalization, friendlier investment tools, and constant investments in financial education are among the main factors that contributed to surpassing the milestone of one million investors.
On the other hand, possible political instability, similar to that of 2024, could be considered a risk factor for accelerating development, according to representatives of the asset management industry.
“At the end of September, I believe we will have surpassed one million investors also in open-end investment funds. We also have record assets,” said Horia Gustă, President of AAF, in the opening of the event.
Present at the Summit, Gabriel Avrămescu, First Vice President of the Financial Supervisory Authority, spoke about the importance of investment funds’ contribution to the development of the capital market, as well as about the support that fund managers can find in the regulatory institution. “Investors’ interest in professionally managed savings and investment solutions is growing, which opens new opportunities for the industry,” he said.
Participants at the Summit agreed that Romania’s investment market is going through a moment of maturation and consolidation that deserves to be celebrated, as the number of investors has practically doubled in just a few years.
Sergiu Manea, CEO of Banca Comercială Română, Romania’s second-largest bank, spoke about the importance of continuous communication with investors regarding investment products and diversification, to avoid situations where they fall victim to social engineering schemes.
Omer Tetik, CEO of Banca Transilvania, the dominant actor in Romanian banking, in turn, said that while the industry’s success so far is important, most of it has come through traditional banking channels. “The market needs diversification. If we look, much of the growth probably comes from selling funds, investments, or pensions through the banking network. There must also be other alternatives,” he said.
The industry experts are optimistic about the future, believing that reaching two or even three million investors will happen faster than the interval it took to reach the first million, through the constant promotion of the concepts of fund investment, diversification, and recurrent investing.
“The private pension system is also a growth catalyst for the investment fund market and raises awareness among individuals about the need to save for retirement using financial instruments other than deposits,” explained Mihail Ion, Vice President of Retail at Raiffeisen Bank Romania.
Regarding the structure of investments and investor preferences, market representatives stated that there is a clear trend of portfolio diversification, with a growing preference for riskier assets such as equities and diversified funds. This reflects market maturation, as investors expand their options, driven by the positive performance of the Bucharest Stock Exchange.
“Many investors started with conservative, fixed-income products and then gradually tried other instruments. When performance is good, they continue to add money, and thus portfolio structures become increasingly diversified,” explained Horia Braun Erdei, President of the Directorate/CEO of Erste Asset Management.
However, Romanian investors also seem to prefer short-term bond funds (money market funds), alongside the growing interest in funds with high equity exposure.
At the same time, Daniel Gavrilă, Director of Lion Capital, said that in recent years the fund has maintained a cautious approach and has not made significant changes to the core structure of managed assets. “We have about one-third of assets exposed to the two major listed banks, Banca Transilvania and BRD. We have pharma in the portfolio, and a significant real estate component, which provides a very good hedge, especially in this inflationary period,” he explained.
Among the existing challenges in the market, the biggest is liquidity, a structural problem that mainly affects open-end funds. The lack of instruments and market depth prevents matching investors’ liquidity demands.
“The existence of derivative instruments and short selling could improve liquidity,” said Alexandru Combei, Investment Manager at BRD Asset Management.
(Photo source: press release)
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