Growth rates of 6.5 percent per annum are more likely to be attributed to emerging markets such as China, or to innovative hightech companies. Few would associate them with managed assets. Yet the volume of assets under management has been rising in Germany since 2005. Despite the financial and euro crisis, the growth rate has doubled to 2.9 trillion euros within a good decade. This compares with German gross domestic product, which climbed in the same period by some 40 percent. However, the golden years are slowly but surely coming to an end. While the asset management market in Germany should reach around 2.9 trillion euros again in 2018, with Germany remaining the third largest market in Europe, competition can be expected to intensify more and more in the struggle for each and every investor.

Despite tighter regulation, digitalization, harsh competition and margin pressure, the investment requirement of both institutional and private investors will remain high in Germany. However, the new background conditions will not allow every supplier to prosper. In particular, medium-sized, capital-efficient funds are increasingly finding themselves in a downward spiral. They are too big to occupy a niche as specialist, and too small to outstrip the competition in terms of costs through efficiency and scale advantages. In the years ahead, every fund supplier will be faced with a decisive question: Focus on alpha as a specialist? Or on discount as a cost leader?

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