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TheCityUK’s Fund Management report, released today, shows that the UK’s fund management sector was responsible for a record £5.4 trillion of funds at the end of 2012, some 30% above the pre-crisis peak.
Over a third of these funds, or around £2 trillion, came from overseas clients, a higher proportion than most other countries. The 2012 figures indicate that the sector has experienced its 4th consecutive year of growth, showing an increase of 6.5% on the previous year. Furthermore, TheCityUK’s report estimates that assets increased nearly 5% in the first three quarters of 2013, with the full year increase forecast to reach 7%.
Nearly two-thirds of funds under management came from institutional clients. Retail clients generated a further 14%, with the remainder accounted for by private client funds and alternative funds.
The UK is one of the leading global locations and by far the largest European centre for fund management. It accounted for over 8% of global fund management assets, totalling $118 trillion at the end of 2012. The US remains by far the biggest source of funds, accounting for nearly half of assets.
Chris Cummings, Chief Executive of TheCityUK, commented:
“The UK is one of the most open markets in the world for fund management. UK firms are also well positioned to gain new international business, particularly in emerging markets where growth prospects look strong. The UK Government is committed to ensuring the UK remains an open and competitive market for international investment.
“While London is central to the UK’s strong international position, other cities such as Edinburgh, Glasgow, Aberdeen, Manchester, Liverpool, Cardiff and Birmingham are also important centres for fund management.”
TheCityUK’s report follows the setting up of the Government’s Financial Services Trade and Investment Board (FSTIB) and its associated Investment Management Strategy.
FSTIB was created to strengthen the competitiveness of the UK financial and related professional services industry, to help UK based firms secure access to markets around the world. FSTIB is chaired by HM Treasury and comprises senior representatives from UK Trade and Investment (UKTI), the Foreign and Commonwealth Office (FCO) and the Department for Business (BIS), with high level input from TheCityUK and five independent external members. FSTIB will have the authority and expertise to identify trade and investment priorities and support UK based firms in pursuing these vigorously across the globe.
Chris Cummings concluded:
“The objective of FSTIB’s investment management work stream is to strengthen the UK’s dominance of investment management strategy by increasing assets under management and increasing the UK’s market share of fund domicile. This would result in an increase in the level of jobs and taxes, to be achieved by focussing on improvements in the key areas of taxes, regulation and marketing.”
The UK fund management sector generated a trade surplus of some £4.1bn in 2012, up 22% on the previous year. The sector employs over 50,000 people in the UK.
