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Bulgarian Association of Asset Management Companies

Bulgarian Association of Asset Management Companies. Evolution of the Asset Management Industry in Bulgaria Daniel Ganev, International Relations, BAAMC. BAAMC History & Mission. Founded Nov 30, 2004 by 8 asset management companies

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Bulgarian Association of Asset Management Companies

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  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 Bulgarian Association of Asset Management Companies

  3. Members of the Association: Bulgarian Association of Asset Management Companies

  4. Goals of the Association • To assist, promote andmakepopular the activities ofthe asset management companies • To integrate andcoordinate the efforts of its members, and to defend their professional interests • To reinforcehigh standards of professionalism among its membersin relation to their activities Bulgarian Association of Asset Management Companies

  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 Bulgarian Association of Asset Management Companies

  6. Bulgarian Fund Industry Facts • 39asset 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 Bulgarian Association of Asset Management Companies

  7. Bulgarian Funds Statistics Bulgarian Association of Asset Management Companies

  8. Bulgarian Funds Statistics Bulgarian Association of Asset Management Companies

  9. The crisis in numbers • 2/3 erosion of aggregate funds assets : from EUR 500 mln (Oct’2007 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! Bulgarian Association of Asset Management Companies

  10. 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! Bulgarian Association of Asset Management Companies

  11. 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 Bulgarian Association of Asset Management Companies

  12. BAAMC Contact Info: Daniel Ganev International Relations, BAAMC Tel: (+359 2) 4008 300 E-mail: ganevd@karoll.bg Bulgarian Association of Asset Management Companies

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