The number of mutual funds and asset management companies is on the rise, even in the aftermath of the financial crisis.
Since last September, the Federal Financial Markets Service has annulled a record number of management company licenses — 45 in all, or almost one per week, according to statistics from the National League of Management Companies. The number stands in sharp contrast to the period from September 2007 to September 2008, when only three licenses were annulled.
But even as funds and asset management companies went out of business at a record rate, new companies were quick to take their place — 59 new licenses were given out in the same period. And while the rate of licensing is down by at least 50 percent compared with precrisis times, the total number of asset management companies has grown from 519 to 532 in the last 12 months, while the number of companies that work with mutual funds has grown from 298 to 325.
Now could be the right time to start an asset management company, as the newly hatched enterprise wouldn’t have to look for excuses to justify its poor performance during the crisis, said Natalya Plugar, director of VTB Asset Management.
This year appeared to be a period of utter devastation for all forms of collective investment — since last September, mutual funds alone have lost 140 billion rubles ($4.7 billion), not including assets held in trusts. This, however, did not stop the number of registered mutual funds from growing by 10 percent in the same period — from 1,081 to 1,188, while the number of open-ended mutual funds shrank by 62 and the number of closed-end funds rose by 101, National League of Management Companies data showed. Funds might have lost a share of their assets to more conservative investments, but there is no doubt that the sector will survive, Plugar said.
While retail mutual funds may have lost their attractiveness to some investors, the industry has been growing because of the success of other funds, namely, closed-end funds and funds for qualified investors. Over 40 bond funds have appeared on the market since the spring of 2008, when the law on mutual funds underwent several key amendments, said National League of Management Companies president Dmitry Alexandrov. The crisis has shifted perceptions of mutual funds as well — while they were once viewed as an investment “for grannies,” they are now more often seen as a well-regulated form of property with a comfortable tax load. The sector’s growth will continue, especially since banks have now taken an interest, Alexandrov said.
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