Measuring Industry Concentration of Equity Investment Funds in the Republic of Croatia

Abstract

The overall objective of this work is to investigate further development of the capital markets in the Republic of Croatia with a focus on industry concentration of equity investment funds with a public offering, and the changes that they have experienced since 2004 to date. Visage the Croatian capital market has changed in this period and therefore the aim is to measure investment capital concentration in the industry of equity investment funds. It is required to determine if in industry is perfect equality present or if the investment capital is directed only to a small number of large funds. Uncertainty, distrust, and a great level of risk are characteristics of the capital markets in development, such as Croatia. The aim is to determine whether the size of net assets of investment fund puts safety at the investor, and thus encourages investors to future investment in the fund, which generally speaking, increase the concentration of capital only in funds with a high value of net assets.Process of transition in the Republic of Croatia affected the development of capital markets and the emergence of new participants, namely an open investment fund. The foundations for longterm sustainable growth of the Croatian capital markets are currently still extremely unstable, and development of the market itself is tied to a sense of distrust and insecurity of its participants. It is necessary to investigate, in poorly developed capital market, if investors perceived greater safety of investments in large funds, which are the symptoms of a large concentration of capital in a small number of funds. We will also investigate whether the development of capital markets leads to a reduction of industrial concentration. Research and hypotheses are focused on the industry of equity investment funds with a public offering in the Republic of Croatia.Industry concentration, Equity funds, Open investment funds, Herfindahl-Hirschman index, Gini index