The market of manana

From an Anglo-Saxon business perspective, the structure of the Spanish asset management market looks like a throwback to a bygone era. The strength of their distribution networks gives the two big domestic banks, Santander Central Hispano and Banco Bilbao Vizcaya Argentaria, 50% of the mutual fund market. This despite the fact that their offering consists almost entirely of conservatively managed in-house funds, that generally merit only mediocre scores from the fund rating agencies. Spanish investors tend to be parochial. Out of a total mutual fund market of E171 billion, only E25 billion is in international assets. The bet all the international managers are making is that open architecture will eventually supersede the closeted, continental business model. However, Spain just does not work like the US or UK. Investors have experimented with an Anglo-Saxon style equity culture, and they did not enjoy the experience. For Spanish investors, advice on asset allocation is much more valuable than being able to add a few basis points on US equities.