Agathi Pafili, Vice President and Head of Government Relations Europe at Capital Group, sees an important role for the asset management sector in light of the European Commission’s ambitions on the Savings and Investment Union. Capital Group has joined DUFAS this summer. For an international asset manager like Capital Group, it is essential to work together with associations like DUFAS in both Brussels and the Netherlands, ensuring that the sector’s perspectives are well-represented in shaping Europe’s financial future.
1. Why is a strong presence in Brussels essential for a global player like Capital Group?
Capital Group is focused on being a partner of choice for institutional clients, financial intermediaries and, in this way, savers across Europe. The EU single market represents key opportunities for Capital Group enabling us to offer a range of our investment solutions including mutual funds (UCITS) and segregated mandates that help our clients meet their investment objectives and life-long goals. In this respect, the regulatory framework governing capital markets’ function and cross-border operations play a critical role; so is Brussels as the capital of the European Union and the location of key policy makers, the European Commission, the members of the European Parliament and representatives of EU’s 27 Member States.
Being present in Brussels provides great insights and understanding of the policies that are directly impactful for our operations. It allows us to share our views on regulatory plans that can potentially re-shape the market for asset managers and also work together with peers to better explain the role of asset managers and the added value we bring for investors and companies in Europe.
2. How does cooperation with a national association such as DUFAS help to strengthen the voice of international asset managers both in Brussels and in the Netherlands?
Building synergies with peers and enabling a coordinated approach across the asset management industry, can accelerate positive results for investment managers and ensure a strong leadership profile for our sector. Our trade associations play a critical role in driving momentum in this direction.
In the Netherlands, DUFAS plays the role via enabling thoughtful exchanges, setting the pace for the industry’s policy positions and being a trusted interlocutor for the national regulators and policy makers - in all those ways, we much appreciate the way DUFAS enhances the overall profile of our industry with clear benefits for all members.
In addition, the connectivity DUFAS allows among market participants, and the intelligence sharing is a very helpful in our advocacy work in Brussels and across the EU single market.
3. With the European agenda focusing on the Savings and Investment Union and further deepening of capital markets, what are the key issues asset managers should keep an eye on?
With household savings amounting to €37 tn in 2023, i.e., one of the world’s highest savings rates, the EU is in need to unlock this capital currently allocated mostly to bank deposits in order to finance its urgent needs for growth, green and digital transition. As of 2024 and even more so after the publication of the Draghi report, the mandate of the European Commission has been focused on establishing a Savings and Investment Union (SIU) to empower savers across Europe to better invest for their life-long goals and channel their capital into the needs of the real economy. This presents a clear momentum for asset managers as the core part of our business model relates to offering investment solutions that help investors access capital markets, optimise returns and diversify financial risks in the short-, medium- and long-term.
The new proposals that the Commission will soon deliver on a. long-term and retirement investment solutions, b. ways to address persisting barriers in the cross-border distribution of investment products in the single market and c. new categories for sustainable investment strategies, can provide opportunities to further enhance savers’ access to capital markets and enrich offerings to help them better meet their objectives. At the same time, the industry needs to remain vigilant on potential challenges and changes to the well-established and successful UCITS brand, as well as to new cumbersome supervisory and regulatory practices that can become a deterrent. This would go against the objectives of simplification and enhancing the global competitiveness of the European market and its players, both of which key EU priorities. Therefore, any change needs to be accountable against how it helps professional managers deliver optimal investment results for European investors.
4. Looking ahead, how do you see the role of Capital Group and DUFAS in further strengthening the position of the European asset management sector within the EU?
At Capital Group, we attribute the utmost importance in our role as fiduciaries of our clients’ assets, the way we channel their investments into debt securities and listed shares and encourage sound capital allocation and corporate governance practices. In this respect, we work in close coordination with associations in key national markets to showcase how our fiduciary role ultimately helps companies navigate challenges and creates long-term and sustainable value for share and bondholders.
DUFAS is in the unique position of representing a national market with a strong investor culture when it comes to long-term savings and retirement schemes, and can rely on market players with long experience in this area. Together with global market players such as Capital Group that bring along global expertise in terms of investors’ needs and successful strategies with long-term results, it can bring valuable experience and best market practices to the table by working with policy makers both at the national and European level in shaping appropriate policies and enable innovation and growth.
