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Cad 3 will hit asset manager profits, says Mercer Oliver Wyman

The European Union's proposed third capital adequacy directive (Cad 3) will force European asset managers to hold significantly more capital than at current levels.

This will reduce their profitability, and could prompt a shake-out in the industry, according to new research by consultants Mercer Oliver Wyman.

Although there may be some relaxation of the Cad 3 framework for certain investment institutions – including those that do not trade on their own account or handle client money – the US consultancy believes the new directive will bring about “a much

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