How asset managers win cross‑border: Scale, regulatory mastery and the new investor reality

At FundForum 2026, Francesca McDonagh, CEO of Universal Investment, explored the pressures shaping today’s cross‑border fund landscape.

She highlighted a set of structural challenges that asset managers across Europe are grappling with: regulatory fragmentation, concentrated domiciles, shifting investor expectations and the accelerating impact of technology. These themes reflect broader industry impacts that determine whether firms can scale effectively in a market where global cross‑border investment flows now reach 8.5 trillion US dollars.

Regulatory fragmentation across Europe

One of the most significant challenges for asset managers is the regulatory fragmentation across European jurisdictions. UCITS provides a strong foundation for cross‑border distribution, but managers still encounter notable differences between markets such as Germany, Luxembourg and Ireland.

This fragmentation creates industry struggles including:

• Divergent legal and reporting requirements
• Slower product launches due to multi‑market compliance
• Operational hurdles when scaling across borders
• Increased complexity for firms without multi‑jurisdictional expertise

As cross‑border ambitions grow, regulatory navigation has become a core operational capability rather than a specialist function.

Concentrated domiciles and limited ecosystem flexibility

Europe’s cross‑border ecosystem is highly concentrated, with Luxembourg and Ireland accounting for more than 90 percent of the region’s fund services market. This concentration shapes strategic decision‑making for asset managers. Ireland continues to attract hedge funds, money market funds and ETFs, while Luxembourg remains the preferred home for private equity, private debt and infrastructure strategies.

For managers, this concentration limits flexibility. Alternative domiciles exist, but they do not yet offer the same depth of ecosystem, regulatory maturity or talent pool. As a result, firms often find themselves reliant on two hubs for most cross‑border ambitions, creating structural constraints around diversification and operational risk management.

Distribution complexity and country‑specific expectations

Even with the right domicile, distribution across Europe presents its own challenges. The continent is not a single market. Investor behaviour, product preferences and distribution channels vary widely between countries, and success depends on understanding these differences in detail.

Managers must consider how investors in each market access products, which wrappers they prefer, and how local intermediaries operate. Expectations around transparency and reporting also differ. This is especially true in the DACH region, where distribution models diverge from those in Ireland or Luxembourg. Without country‑specific insight, firms risk launching products that do not align with local demand or investor expectations.

The great wealth transfer and the next‑generation investor

A major structural shift is underway as 83 trillion US dollars in private wealth is expected to change hands over the next 20 to 30 years. Younger and first‑time investors behave differently from previous generations. They are more self‑directed, more digital and more focused on immediacy and transparency.

This shift is already visible in the rise of ETFs, neobanks and digital brokers. It is also reflected in Germany’s 2027 pension reform, which will expand access to capital markets for both employed and self‑employed individuals. For asset managers, this means adapting product design, communication and distribution strategies to an investor base that expects clarity, simplicity and control.

Technology, tokenisation and AI reshaping competitiveness

Technology is becoming central to how fund servicing and distribution evolve. Tokenisation continues to attract interest, though its impact on AUM remains uncertain. ETFs are accelerating as investors seek transparent and liquid exposure. But the most transformative force is AI.

AI is influencing operational efficiency, risk management, client engagement and product development. It is also reshaping distribution analytics, enabling firms to understand investor behaviour with greater precision. The challenge for the industry is the pace of change. Firms that fail to adopt AI risk falling behind competitors who use it to streamline processes and enhance investor experience.

What the next 12 to 18 months mean for asset managers

Across Europe, asset managers face a convergence of structural pressures: regulatory fragmentation, concentrated domiciles, distribution complexity, shifting investor expectations and rapid technological change. The firms that succeed will be those who build capabilities around regulatory mastery, multi‑domicile expertise, distribution intelligence and AI‑enabled transformation.

Cross‑border growth is no longer defined by launching products internationally. It is defined by understanding the full ecosystem of regulation, investor behaviour and technology that shapes Europe’s fund landscape.