UK assets under management grew 8% to a record £4.1 trillion at the end of 2007 according to IFSL’s Fund Management 2008 report. Early indicators for 2008 show that the industry has experienced net outflows as some high street banks have used their asset management arms to improve the liquidity of their banking operations. Reduced investor confidence has also resulted in negative retail fund flows with UK domiciled retail funds declining 7% in the year up to August 2008 to £427bn.
UK institutional funds were the source of two-thirds of funds under management in 2007. Around 17% came from retail funds (unit and investment trusts), 10% from alternative funds (hedge funds, property funds and private equity funds) and the remainder from private clients.
Fund management makes a significant contribution to the UK economy, accounting for 0.8% of GDP and employing over 50,000 people in 2007.
Global trends: Worldwide conventional fund management assets, increased 14% in 2007 to $74.3 trillion (see Table below). Pension assets totalled $28.2 trillion, with a further $19.8 trillion invested in insurance funds and $26.2 trillion in mutual funds. Together with alternative assets, such as those of sovereign wealth funds, hedge funds, private equity funds and funds of wealthy individuals, assets of the global fund management industry probably totalled around $110 trillion.
The UK is the second largest fund management market after the US and by far the biggest centre in Europe. London continues to be the leading international centre for fund management with over a third of its funds under management from overseas.
|
Sources of global conventional assets under
management by type, 2007 |
|||||
|
$ billion |
Pensions
|
Insurance
|
Mutual funds
|
Total
|
% of total
|
|
17,205 |
6,324 |
12,012 |
35,541 |
47.9 |
|
|
|
3,161 |
2,862 |
945 |
6,968 |
9.4 |
|
|
1,083 |
2,839 |
714 |
4,636 |
6.2 |
|
|
167 |
2,230 |
1,990 |
4,387 |
5.9 |
|
|
563 |
1,880 |
372 |
2,815 |
3.8 |
|
Others |
6,049 |
3,701 |
10,167 |
19,917 |
26.8 |
|
Total
|
28,228
|
19,836
|
26,200
|
74,264 |
100
|
* these figures only show domestically sourced funds for each country without regard to where the funds are managed
** No international comparisons are available for total funds under management in each country
Source: IFSL estimates
