Bulgarian%20Association%20of%20Asset%20Management%20Companies

1
Bulgarian Association of Asset Management
Companies

• Evolution of the Asset Management Industry
• in Bulgaria
• 
  Daniel Ganev,
• International Relations, BAAMC

2
BAAMC History Mission

• Founded Nov 30, 2004 by 8 asset management
  companies
• Currently 30 members, 4 more candidates on the
  way..
• Key objective - to reinforce high professional
  standards ethical norms
• to promote investor trust and confidence
  to make fund industry popular in society
• Code of Ethics adopted Sep 2006 entirely
  based on fundamental principles of EFAMA
• Cooperation with all market institutions, local
  and international organizations
• EFAMA membership pending

3
Members of the Association

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Goals of the Association

• To assist, promote and make popular the
  activities of the asset management companies
• To integrate and coordinate the efforts of its
  members, and to defend their professional
  interests
• To reinforce high standards of professionalism
  among its members in relation to their activities

5
BAAMC Accomplishments

• Important legislative changes
• amendments of the Law on Public Offering of
  Securities and respective ordinances,
  harmonization with EU directives, tax laws, etc.
• List of Measures Aimed at Market Stabilization
  during crisis
• Uniform Industry Rules and Methods
• Common table with fund quotes, Funds
  Classification Methodology (based on FEFSI
  Rules), Calculation of Funds Returns, Portfolio
  Valuation and Risk Mgt Rules
• Cooperation with professional organizations
• Association of Inv Intermediaries, Association
  of Banks, Association of Pension Assurance
  Companies, Association of Industrial Capital,
  Association of IR Directors, EFAMA, World Bank
• Educational seminars for the public and
  professional community -
• Burov Foundation, Plovdiv International
  Fair, Pension Companies World Forum, FSC Exam
  Board

6
Bulgarian Fund Industry Facts

• 39 asset management companies
• 85 domestic mutual funds (UCITS under art. 1 (2)
  of Directive 85/611/EEC)
• Total domestic industry size BGN 330 mln (EUR
  170 mln)
• 42 in equity funds (down from 60 at the peak),
  37 in balanced funds, 13 in money mkt funds
  (strong demand YTD similar to Western Europe),
• 9 in bond funds
• Current ownership structure of funds
• 1/3 households, 1/3 corporate, 1/3
  institutional
• Foreign funds distributed in Bulgaria 7
  different families

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Bulgarian Funds Statistics
8
Bulgarian Funds Statistics
9
The crisis in numbers

• 2/3 erosion of aggregate funds assets
• from EUR 500 mln (Oct2007 peak) to EUR 170
  mln (current low)
• Half of decrease due to net redemptions, the
  other half stocks depreciation
• Bad news ? catastrophic 2008 - funds shed a
  quarter of a billion EUR
• Good news ? we survived!

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Crisis Measures Undertaken

• Regulator ? frequent communication with fund
  managers, statistics gathering and analysis,
  flexible approach and understanding
• BAAMC ? regular meetings, constant communication
  discussions on possible scenarios, team spirit!
• Fund manager ? risk management, liquidity watch,
  investor relations, regular updates info
  dispatch
• No fund ever closed redemptions! no single
  suspension of exchange trading! no single
  official investor complaint!
• Most actively managed funds performed better
  than benchmark!

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Expected Development

• Expense optimization, structural changes,
  outsourcing back-office functions
• Software upgrades, IT modernization, smaller
  teams
• Greater investor choice, new distribution
  channels, lower fees
• Flight toward index and more passively managed
  strategies
• Lower risk appetite, global bias vs. domestic
  focus
• Custom-tailored products, private banking,
  discretionary accounts

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BAAMC Contact Info

• Daniel Ganev
• International Relations, BAAMC
• Tel [phone]
• E-mail ganevd_at_karoll.bg