Key Takeaways
- • Sirios Capital Management launched the first European hedge fund-style ETF with performance fees, charging a 1.20% base fee plus 20% of any outperformance, marking a structural shift in ETF pricing models toward hedge fund economics.
- • European hedge fund-style ETFs are proliferating, with BNP Paribas Asset Management developing managed futures and options-based strategies, while Ossiam received Luxembourg regulatory approval in July 2025 for a long/short equity ETF, and DBi and Legal & General already offering similar products.
- • Italian asset managers are rapidly expanding into the ETF wrapper, with Generali Investments establishing a dedicated ETF division and Eurizon Capital launching active ETFs and emerging markets equity products, capitalizing on Italian ETF AUM growth from €34.3 billion (2014) to €121.5 billion (2024).
- • Europe's ETF market significantly outpaced the US in 2025, with the European market projected to grow at a 10.10% CAGR from $2.80 trillion in 2026 to $4.60 trillion by 2031, reflecting structural advantages in fixed-income ETF efficiency and regulatory flexibility.
- • Fund concentration is rising across European UCITS, with funds exceeding €10 billion in AUM representing 25% of the market at end-2024, while global ETFs surpassed $20 trillion in assets under management.
Summary
Europe's ETF market is experiencing accelerating innovation in liquid alternatives, driven by asset managers seeking to capture demand for hedge fund-like strategies within a regulated, transparent wrapper. Sirios Capital Management's launch of a long/short equity ETF in partnership with iM Global Partner represents a watershed moment: it is the first European ETF to charge performance fees directly to investors, operating at 1.20% base plus 20% of outperformance. This structural innovation brings hedge fund compensation mechanics into the ETF ecosystem, signaling investor appetite for sophisticated strategies beyond passive indexing.
The competitive landscape is intensifying as major asset managers recognize the opportunity. BNP Paribas Asset Management has assembled a suite spanning managed futures and long/short equity strategies alongside options-based products. Ossiam received regulatory approval from Luxembourg authorities in July 2025 to launch a long/short equity ETF, while established players DBi and Legal & General continue scaling their hedge fund-style offerings. This proliferation reflects broader acceptance among European regulators of actively managed, liquid alternative structures within the UCITS framework—a notable regulatory divergence from more restrictive regimes elsewhere.
Italian asset managers are capitalizing on this momentum with particular aggression. Generali Investments, managing €736 billion in assets, appointed Fideuram's head of ETF solutions to establish a dedicated ETF division, signaling institutional commitment to the wrapper. Eurizon Capital, an Intesa Sanpaolo subsidiary, launched its active ETF platform and deployed 26 index-tracking share classes, while its UK affiliate released a high-conviction emerging markets equity ETF. This activity reflects exceptional localized growth: Italian-listed ETF AUM nearly quadrupled from €34.3 billion in 2014 to €121.5 billion in 2024—a 254% increase over a decade.
Macro trends underpin this expansion. Europe's ETF market outpaced the US by nearly 50% in 2025, with projected growth from $2.80 trillion (2026) to $4.60 trillion (2031) at a 10.10% CAGR. Global ETF assets reached $20 trillion, with ongoing structural improvements in fixed-income market infrastructure making the ETF wrapper increasingly efficient for institutional capital. Concurrently, fund concentration is rising: UCITS exceeding €10 billion in AUM represented 25% of the market at end-2024, suggesting consolidation alongside product proliferation. The convergence of regulatory clarity, technological efficiency, and investor demand for liquid alternatives is reshaping European asset management's competitive dynamics.
The competitive landscape is intensifying as major asset managers recognize the opportunity. BNP Paribas Asset Management has assembled a suite spanning managed futures and long/short equity strategies alongside options-based products. Ossiam received regulatory approval from Luxembourg authorities in July 2025 to launch a long/short equity ETF, while established players DBi and Legal & General continue scaling their hedge fund-style offerings. This proliferation reflects broader acceptance among European regulators of actively managed, liquid alternative structures within the UCITS framework—a notable regulatory divergence from more restrictive regimes elsewhere.
Italian asset managers are capitalizing on this momentum with particular aggression. Generali Investments, managing €736 billion in assets, appointed Fideuram's head of ETF solutions to establish a dedicated ETF division, signaling institutional commitment to the wrapper. Eurizon Capital, an Intesa Sanpaolo subsidiary, launched its active ETF platform and deployed 26 index-tracking share classes, while its UK affiliate released a high-conviction emerging markets equity ETF. This activity reflects exceptional localized growth: Italian-listed ETF AUM nearly quadrupled from €34.3 billion in 2014 to €121.5 billion in 2024—a 254% increase over a decade.
Macro trends underpin this expansion. Europe's ETF market outpaced the US by nearly 50% in 2025, with projected growth from $2.80 trillion (2026) to $4.60 trillion (2031) at a 10.10% CAGR. Global ETF assets reached $20 trillion, with ongoing structural improvements in fixed-income market infrastructure making the ETF wrapper increasingly efficient for institutional capital. Concurrently, fund concentration is rising: UCITS exceeding €10 billion in AUM represented 25% of the market at end-2024, suggesting consolidation alongside product proliferation. The convergence of regulatory clarity, technological efficiency, and investor demand for liquid alternatives is reshaping European asset management's competitive dynamics.
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