Assets under management with UK fund managers increased to a record £8.1 trillion in 2016, an annual rise of 17.4%, according to a report from the TheCityUK.
Ironically, the growth was in part caused by an increase in the value of overseas assets by the depreciation of sterling against other major currencies following the Brexit referendum. In addition, over a third, a record £2.6 trillion, is managed on behalf of overseas clients by UK managers. The UK is the third largest international fund management centre after the US and Japan.
TheCityUK chief economist and head of research, Anjalika Bardalai, commented: “The UK fund management industry continues to be a world leader at managing overseas assets. However, technological advancements and increasing competition from emerging centres such as Hong Kong and Singapore mean that UK fund managers cannot be complacent.”
Bardalai added: “To maintain London and the UK as a global centre for asset management, it is vital that an ambitious and pragmatic Brexit deal is secured. Failure to do so will only strengthen existing centres in the US and Japan as well as rising competitors in Asia.”
TheCityUK’s report also found that strong net exports of £6.2 billion helped offset the UK’s large trade deficit in goods. Overall, UK-based fund managers generated £3.3 billion of UK economic output in 2016, employing 52,000 people across the UK. Institutional investors account for around four-fifths (79%) of total UK funds under management, with the remainder accounted for by retail and private clients.