Investment fund market
Raiffeisen INVEST sh.a.
Raiffeisen INVEST sh.a. was the pioneer in the Albanian investment fund market, with the launch of its first investment fund (Raiffeisen Prestigj short-term local bond fund) in March 2012. It remained the only asset management company (AMC) for investment funds until 2017, when other players joined the market.
Raiffeisen Prestigj, to this day, is the largest investment fund (61.5% market share and 341 million euro of assets under management (AUM), and Raiffeisen INVEST sh.a. is an absolute leader in the local investment fund market, managing 87.1% of total market asset value.
The other asset management companies have a modest market share while each of them is licensed to manage non-UCITS* funds, the predominant type of fund in the Albanian market.
Credins Invest
Credins Invest founded by Credins Bank – an Albanian bank with 100% local capital – is the only AMC managing two alternative investment funds, which make up for most of its 10.2% market share.
Other asset management companies
ABI Invest (1.3% market share) founded by ABI Bank, part of NCH Capital US private equity group,
WVP Fund Management company (0.9% market share), part of WVP Graz, Austrian insurance brokerage financial group,
ALBSIG Invest (0.5% market share), founded by ALBSIG Albanian insurance company, part of a local important Group (Kastrati).
Since August 2023, Intesa Sanpaolo Bank (part of the Italian banking group) has been carrying out the activity of the sales agent in the Republic of Albania of two UCITS funds managed by Luxembourg based Eurizon Capital S.A..
With 16 registered investment funds at the end of 2023 (one of which is still not operating), the investment fund market recorded a yearly growth of 19% reaching a total NAV** of 554.5 million euro where 483.2 million euro of it belongs to Raiffeisen INVEST sh.a..
The Albanian investment fundmarket is dominated by funds with low to medium risk profile, denominated in local currency and investing mainly in Albanian governments securities:
Fixed income funds represent 88.3% of the market,
alternative investment funds investing in real estate 9.3%,
mixed funds 1.4% and
equity funds only 1%.
Lump sum investments prevail but saving plans have been introduced at a faster rate in the last few years.
The capital market remains underdeveloped with one private capital stock exchange operating since 2018. The activity is insignificant, with low volumes transactions in local government bonds.
Raiffeisen INVEST sh.a.
Raiffeisen INVEST sh.a. has also been the leading company in innovation and new products, one example being the launch of the first ESG investment fund through the first master-feeder structure in the country. Digital transactions are also enabled for its customers.
Private pension fund market
Currently in Albania only the first and the third pillar exist. The first pillar is publicly run, and it pays “defined benefits” under a pay-as-you-go system. While the voluntary supplementary pillar (third pillar) has its own important role to play in the pension system in Albania, it is still in an embryonic stage.
Voluntary pension fund market
The voluntary pension fund market started in 2005 with American Pension Fund of Albania, which was later acquired by Raiffeisen INVEST sh.a. in 2009. Thus, the local asset management company has been managing the first voluntary pension fund in the market, while other management companies started operating in the following years. At the time being, there are four AMCs managing a total of six voluntary pension funds in Albania, all also having a license from the local regulator to manage non-UCITS funds.
All pension funds have similar profiles, being fixed income funds, denominated in local currency, investing in Albanian government securities and amount to a total NAV of 76.8 million euro.
Raiffeisen INVEST sh.a. has a market share of 20.5% and competitors in the market include:
SIGAL Invest, part of SIGAL UNIQA Group Austria, an Albanian insurance companies group (39.6% market share),
Credins Invest (31.2% market share) and
Albsig INVEST (8.7% market share).
Raiffeisen Private Pension Fund is one of the main players in the market, having experienced satisfactory NAV growth, especially in the last years.
Recently a new law on private pension funds has been approved, introducing new fiscal incentives for pension fund members. Such a development, if accompanied by broad campaigns for financial education and continuous awareness – not only by market actors, but also by public institutions, regulatory authorities, social partners etc. – could give a boost to the growth of this market in the upcoming years.
* UCITS: The Undertakings for the Collective Investment in Transferable Securities (UCITS) is the European Commission's regulatory framework for managing and selling mutual funds. UCITS funds can be registered and sold in any country in the European Union using unified regulatory and investor protection requirements.
** NAV: Net Asset Value
Source: Raiffeisen INVEST sh.a., as of August 2024