Spain’s asset management industry will consolidate dramatically in the next few years as firms push for greater efficiency and performance, a new survey by RBC Dexia and Accenture says.

Even though the industry is dominated by a small number of firms, with the top three managers accounting for 45 per cent of assets under management, the average size of funds in Spain is only €57 million (around $71.5 million), contrasting with an average of €300 million in Switzerland and €262 million in the UK.

The total number of funds in Spain has been contracting, falling about 20 per cent to 2,500 in the past three years owing to industry consolidation. This trend will continue, the report said.

Throughout Europe as a whole, a funds market once heavily fragmented – split into a tapestry of different tax and other rules – has been consolidating, as pointed out by recent research from Lipper, for example. For years, advocates of a single European funds market have pushed for a less fractured market so that end-investors can reap the benefits of lower costs via economies of scale, as in the North American market.

“Spanish fund firms are concentrating on bottom-line indicators such as fund performance and increased assets under management. They recognise the need to restore credibility and investor confidence by showing they are delivering on their performance promises.” José Maria Alonso-Gama, managing director of RBC Dexia in Spain, said in the report.

Of the 33 investment companies surveyed for the report, 95 per cent of local managers and 91 per cent of foreign managers cited increased assets under management as a key indicator of success over the next two years.

Among other performance signs, fund performance was cited by 91 per cent of local managers and 73 per cent by foreign managers respectively; increased service quality was cited by 86 per cent and 45 per cent. When it came to development of new products, some 36 per cent of foreign managers cited this as important but only 9 per cent of local managers did so.