Euroclear fuels competition with Allfunds and Inversis after buying the fund supermarket MFEX

The Belgian has taken over the Nordic platform and adds pressure to the European wholesale market, which is led by Allfunds and where Inversis wants to grow.

Euroclear headquarters in Poland.

More competition for mutual fund supermarketsespecially for the Spanish Allfunds and Inversis Banco. Belgian financial group Euroclear has closed the purchase of the Nordic platform MFEX, which puts pressure on the wholesale network from which these investment products so in vogue among customers are distributed, especially with the ultra-low interest rates maintained by the ECB.

Euroclear, whose business is based on post-trade services, that is, the settlement and custody of national and cross-border securities (bonds, shares and derivatives) for investment funds, had announced its agreement with MFEX last March. The financial terms of the transaction have not been disclosed.

For those who do not know MFEX, it is in the top-10 of the largest investment fund platforms in Europe, a ranking led by the Spanish Allfunds. The MFEX group was founded in Sweden in 1999. Its general manager for Spain and Portugal is Antonio Manso, who came to the firm in 2018 from Ahorro Corporación and in 2020 was promoted to first sword. It should be remembered that, in 2018, MFEX had acquired the Spanish platform Ahorro Best Funds from Ahorro Corporación.

The Nordic company covers a global market amounting to 320,000 million euros in assets under management. In addition to distributing funds, it also does trading, custody and data technology solutions, a market infrastructure business that is expanding and to which practically all the wholesale platforms in the sector are going. In your case, it distributes among the banks, insurers and other finalist investment firms that are hooked on its platform more than 80,000 investment funds from 960 different managers.

The Euroclear operation is part of a context of high competition in the old continent for this type of wholesale supermarkets. A business niche that the Spanish Inversis Banco (of the Banca March group) wants to attack after its failed sale attempt at the beginning of 2019.

Investments and Allfunds

As Inversis has recently announced, it will allocate 100 million euros over the next three years to grow both in Spain and abroad. Its two strategic pillars are to undertake purchases and advance in its technological transformation and in the digitization of investment services. In this second aspect, Accenture is helping you thanks to a strategic alliance.

Since 2010, the March’s wholesale investment bank, led by Albert del Cid, it already offers some services in Switzerland, Portugal, the United Kingdom, Chile, Peru and Uruguay. But he wants to grab a bigger piece of the pie in Europe and also in Latin America. On their roadmap is the launch of investment services in Luxembourg and they are following the evolution of regulations on crypto assets to set foot in the digital currency sector such as bitcoin or ethereum.

Allfunds headquarters in Madrid.

Allfunds headquarters in Madrid.

Both MFEX (which is in the top-10 European) such as Inversis (for the moment outside this ranking) have to deal with the spectacular growth of the also Spanish Allfunds. The wholesale bank of funds and wealthtech lead by Juan Alcaraz It has been listed since April on Euronext Amsterdam, in what has been the largest IPO of a national company in many years.

Through June, Allfunds’ assets under management increased by 16.4% compared to 2020, to close to €1.4 trillion. Their Half-year net profit was 117.4 million euros, 94% more than in the same period of the previous year, when it reached 60.6 million in the middle of the first wave of Covid-19. Since its debut, Allfunds stock has revalued 21%, up to 16.78 euros by title.

Allfunds’ reach is global, where it also competes with MFEX, although its scale is much larger. At that level, his main rival is Pershing, the platform of BNY Mellon and one of the largest on the planet. At the moment, Allfunds is focusing its growth on Europe (France and Germany)does not leave the United States aside and, above all, wants to be a relevant actor in Asia.

It was already present in Singapore and Hong Kong and a few days ago it received authorization to operate in Shanghai through a local office, to balance its strong position in the market offshore as a new entrant on the market offshore of the region, the fastest growing in the world.

Euroclear fuels competition with Allfunds and Inversis after buying the fund supermarket MFEX

The Belgian has taken over the Nordic platform and adds pressure to the European wholesale market, which is led by Allfunds and where Inversis wants to grow.

Euroclear headquarters in Poland.

More competition for mutual fund supermarketsespecially for the Spanish Allfunds and Inversis Banco. Belgian financial group Euroclear has closed the purchase of the Nordic platform MFEX, which puts pressure on the wholesale network from which these investment products so in vogue among customers are distributed, especially with the ultra-low interest rates maintained by the ECB.

Euroclear, whose business is based on post-trade services, that is, the settlement and custody of national and cross-border securities (bonds, shares and derivatives) for investment funds, had announced its agreement with MFEX last March. The financial terms of the transaction have not been disclosed.

For those who do not know MFEX, it is in the top-10 of the largest investment fund platforms in Europe, a ranking led by the Spanish Allfunds. The MFEX group was founded in Sweden in 1999. Its general manager for Spain and Portugal is Antonio Manso, who came to the firm in 2018 from Ahorro Corporación and in 2020 was promoted to first sword. It should be remembered that, in 2018, MFEX had acquired the Spanish platform Ahorro Best Funds from Ahorro Corporación.

The Nordic company covers a global market amounting to 320,000 million euros in assets under management. In addition to distributing funds, it also does trading, custody and data technology solutions, a market infrastructure business that is expanding and to which practically all the wholesale platforms in the sector are going. In your case, it distributes among the banks, insurers and other finalist investment firms that are hooked on its platform more than 80,000 investment funds from 960 different managers.

The Euroclear operation is part of a context of high competition in the old continent for this type of wholesale supermarkets. A business niche that the Spanish Inversis Banco (of the Banca March group) wants to attack after its failed sale attempt at the beginning of 2019.

Investments and Allfunds

As Inversis has recently announced, it will allocate 100 million euros over the next three years to grow both in Spain and abroad. Its two strategic pillars are to undertake purchases and advance in its technological transformation and in the digitization of investment services. In this second aspect, Accenture is helping you thanks to a strategic alliance.

Since 2010, the March’s wholesale investment bank, led by Albert del Cid, it already offers some services in Switzerland, Portugal, the United Kingdom, Chile, Peru and Uruguay. But he wants to grab a bigger piece of the pie in Europe and also in Latin America. On their roadmap is the launch of investment services in Luxembourg and they are following the evolution of regulations on crypto assets to set foot in the digital currency sector such as bitcoin or ethereum.

Allfunds headquarters in Madrid.

Allfunds headquarters in Madrid.

Both MFEX (which is in the top-10 European) such as Inversis (for the moment outside this ranking) have to deal with the spectacular growth of the also Spanish Allfunds. The wholesale bank of funds and wealthtech lead by Juan Alcaraz It has been listed since April on Euronext Amsterdam, in what has been the largest IPO of a national company in many years.

Through June, Allfunds’ assets under management increased by 16.4% compared to 2020, to close to €1.4 trillion. Their Half-year net profit was 117.4 million euros, 94% more than in the same period of the previous year, when it reached 60.6 million in the middle of the first wave of Covid-19. Since its debut, Allfunds stock has revalued 21%, up to 16.78 euros by title.

Allfunds’ reach is global, where it also competes with MFEX, although its scale is much larger. At that level, his main rival is Pershing, the platform of BNY Mellon and one of the largest on the planet. At the moment, Allfunds is focusing its growth on Europe (France and Germany)does not leave the United States aside and, above all, wants to be a relevant actor in Asia.

It was already present in Singapore and Hong Kong and a few days ago it received authorization to operate in Shanghai through a local office, to balance its strong position in the market offshore as a new entrant on the market offshore of the region, the fastest growing in the world.

Gold loses weight in investment portfolios for the first time in six years

The listed investment products in the precious metal had been recording capital inflows uninterruptedly since 2016.

Investment gold bars.

The messages of economic recovery and the the pull of risk assets penetrated deep into the portfolios throughout the last exercise. So much so that, for the first time in the last six years, the quintessential active haven lost prominence in its composition. Nothing less than 9,900 million dollars came out of gold investment products during 2021.

Although gold has traditionally been perceived as one of the most useful hedges against the inflation spike last year, the search for more generous returns that those of the precious metal played against him throughout the past year. This is demonstrated by the investment figures on listed products provided by BlackRock.

The exchange-traded products (ETP) of investment in gold barely added capital inflows during the first two months from last year. And in the best of cases, a cumulative volume of net subscriptions of 2,000 million dollars was barely around. Since then, as the economies began to show signs of recovery and the stock markets have made a sustained comeback, refunds ruled the roost Month after month.

The only exception to this movement was in the summer, when many investors opt for a tactical twist for your wallets in order to lose exposure to the ups and downs of some risky assets in order to get off the quote screens. Furthermore, this movement coincided with the outbreak of the fifth wave of infections by Covid-19 in Europe and the US, which promoted a certain return to assets considered safe haven.

If the number of redemptions in investment products on gold was significant by itself, it reaches a greater magnitude if one takes into account that throughout 2020, the year of the outbreak of the pandemic, they registered net capital inflows of 45,000 million of dollars. As if that were not enough, according to data provided by BlackRock, it would be necessary to go back to 2013 to witness a greater withdrawal of positions than last year.

best in pocket

Regarding this point, one more factor is added that the analysis of the American manager overlooks. Tomás Epeldegui, director of Degussa Spain, points out that a large group of investors would have preferred to balance their investment portfolios with the direct bet on physical gold pieces instead of investment products.

This trend was already seen at the time that Covid-19 crossed the borders of Europe and even caused a depletion of stocks of some parts. In addition, Epeldegui points out that once learned the lesson that volatility is back in the markets “there is a part of investors that could have less taste for the leverage that one assumes when contracting certain financial derivatives”.

Several commodity analysts agree that, in times of turbulence, investors demand safe assets, but not only that, but also as tangible as possible. Especially those with a more conservative profile. In this sense, an ingot, a coin or a nugget of gold are so important that they can be keep in a pocket or a safe.

To finish subtracting prominence from listed gold investment products, several managers point out that 2021 was “the year of the consolidation of cryptocurrencies”. A kind of that appeared on the radar of many a year earlier in the form of a bitcoin that was presented as ‘digital gold’.

Bitcoin and the Fed

Since then, it has been attracting more and more investors with the claim of its revaluation, but above all of a volatility that, well managed, can report sensible returns. However, it is here that his supposed safe haven character has been highly questioned, since once he became a mass asset he has moved to the sound of the stock markets in their last bearish episodes.

Furthermore, the same central banks, which with its liquidity hoses pushed many to seek refuge in the precious metal, they seem to have pushed the way back with their first stimulus withdrawal announcements. Something that has been noticed especially around the dollar appreciation with the biggest plans hawkish of the US Federal Reserve (Fed).

The global head of raw materials and derivatives analysis at Bank of America, Francisco Blanch, points out that although gold “could recover prices because rates remain low and imbalances are growing”, the truth is that “the Fed plan will dampen the trend”. And in the US investment bank they are discounting up to nine rate hikes between now and the end of 2023.

The data collected by BlackRock agrees with this assessment, since both in October and November the outflow of capital accelerated of ETPs on gold. Two months that coincide with the rumors about the beginning of the withdrawal of stimuli from the US central bank and the confirmation of the activation of the tapers with a first downward adjustment of its debt purchase program.

With all this, the blow of this retreat in gold was felt even in the commodity ETP category. According to data from the American manager, over the past year there were net investment outflows of 2,800 million dollars in these products, which meant its return to red numbers in terms of capital flow after two years in positive.