Why is there actually a need for greater insight into the asset management sector?
“This year’s DUFAS member survey revealed that some DUFAS members are interested in gaining a better understanding of quantitative trends in the asset management sector. Data is already available, for example from the two regulatory authorities, De Nederlandsche Bank and the Netherlands Authority for the Financial Markets. However, these sources do not provide insight into the sector at every level. You can see what’s happening in the Netherlands at an aggregated level, but it’s much harder to see what’s happening at the level of individual types of funds and mandates.”
Investment funds are probably the best-known example. You can look at what they invest in: from government bonds to stocks, infrastructure, and private equity. It’s also interesting to see who invests in them. These can be individual investors, but also pension funds and other institutional investors.
In addition, there are alternative investment funds and discretionary investment mandates. In the case of the latter, a single party entrusts a manager with a specific mandate. Information is less readily available, particularly regarding discretionary investment mandates, even though large Dutch pension funds have been opting for this type of investment more frequently in recent years.’
How do you plan to collect that information?
“We first looked at how other countries handle this. In Germany and Italy, there are examples of systems in which administrators share data with one another. The principle is that you make information available at a certain level and, in exchange, can also view data from other administrators at that same level.”
Such a system does not yet exist in the Netherlands. The data that administrators submit at the aggregate level is available from De Nederlandsche Bank. More detailed data is collected for supervisory purposes, among other things, but it is not published in the same way.
With DUFAS, we’re building a database that will give administrators greater insight into each other’s operations. It’s important that we strike the right balance. Sharing everything might be too much, especially since aggregated information is already available through DNB. So we need to determine which data is useful to share and at what level that can be done.”
How does that database benefit the administrators themselves?
“The administrators want insight into the sector. This will help them better understand how the sector is structured and how their own activities compare to those of other parties.”
For DUFAS, this is particularly valuable for advocacy. If you have in-depth knowledge of the sector, you have a better understanding of what you’re talking about. This also allows you to contribute more effectively in discussions with, for example, government representatives.
“That’s why we also look at data more closely related to advocacy, such as how many people work in the sector and how much revenue companies generate. This provides a more complete picture of the economic significance of the work done in asset management.”
Are administrators willing to share their data with one another?
“I’m pleasantly surprised. The parties I’ve spoken with about this have responded enthusiastically and are willing to cooperate. That’s understandable. There are already other databases containing fund data, albeit with different information. So fund managers are used to sharing certain data. If you want to attract retail investors, you don’t keep information about a fund secret either. For example, you disclose how the fund has performed.”
"What you need is an organization that will take the initiative and is willing to invest in it. A trade association is a logical choice for this. DUFAS wants to organize this and has enlisted SEO to conduct the research."
What's next for the project?
“We are working with a group of experts made up of DUFAS members who actively support the initiative. Together with this group, we first defined what data we want to collect. That process is now largely complete. Our guiding principle is to align with existing definitions and to design the data collection in a pragmatic and feasible way.”
The next step is to specify exactly what data can be shared and how. We will then test the database with the working group. After that, we want to show other DUFAS members how it can benefit them and invite them to participate.
"From a technical standpoint, we’ve already done a lot of preparatory work: we’ve defined a portal, a database, and a dashboard. We’re ensuring that security demonstrably meets the standards that financial institutions have come to expect. The dashboard is intended exclusively for members who participate directly and submit data. It is not publicly accessible."
When can other DUFAS members participate?
“We’re aiming for the first quarter of next year. It’s important that we first gain experience with the current group and properly address security and other practical matters.”
The more parties that participate, the more valuable the data collection becomes. Participating members gain access to information that would otherwise not be available to them at the same level of detail. That is also the reason for encouraging other members to participate.
"The feedback so far is encouraging. The parties already involved are professional, know what they're talking about, and are willing to cooperate. I hope we can extend that involvement to the rest of the sector."
