Increasingly global UK investment hub revealed as Brexit preparations begin

Thursday 29 September 2016

• Total industry assets now stand at £5.7 trillion
• £2.2 trillion managed in the UK for overseas clients
• The UK manages around 37% of European assets
• £1 trillion of UK managed funds domiciled offshore
• Around 92,000 people are now employed by the asset management industry

The Investment Association’s latest flagship survey has revealed an increasingly global investment hub based in the UK, as preparations to exit the European Union begin.

As preparations begin for negotiating the UK’s exit from the EU, this year’s survey highlights the importance of continuing to grow the UK investment hub for the benefit of savers, businesses and the wider economy.

This year’s annual Asset Management Survey has revealed an industry that continues to succeed in global markets, with £1 trillion of overseas-domiciled funds being managed in the UK at the end of 2015 (£895 billion in 2014).

Overall at the end of last year the industry managed £1.2 trillion for clients in Europe, in funds and investment mandates, as well as £310bn for clients in the US and £660bn for clients located in the rest of the world.

The ownership of UK based asset managers is also increasingly international. US owned firms operating in the UK now account for 47% of the industry’s assets under management.

The UK investment hub brings significant benefits to the economy, accounting for 6% of net services exports, employing over 92,000 people and putting the nation at the centre of global asset allocation.

The future of the industry post-Brexit

The UK’s investment management industry plays a vital role for consumers both domestically and across Europe. It now runs over £1.2 trillion on behalf of European clients, representing nearly 40% of total European assets which is more than the French, German and Italian industries combined.

As well as providing vital products and services for savers across the world, the industry plays a crucial role in funding businesses and the economy as a whole through tax revenues, job creation and economic stability and growth.

The investment industry has benefited from the free movement of people across the EU and continued access to talent globally is of utmost importance if the industry is going to continue to prosper.

We estimate that over 92,000 people are now employed in activities related either directly or in-directly to asset management, including fund and wider administration activities. People directly employed by the industry in the UK grew 5% from 35,100 to 37,000 in 2015.

Although London and Scotland remain the key centres of employment, the industry is ever more present across the UK with a number of firms having offices in locations including Bristol, Norwich, Peterborough, Leeds, York, Bournemouth, Cardiff, Oxford and Chester.

It remains unclear what the relationship between the EU and the UK will be like post-Brexit, but the decision to leave the EU may have ramifications for all industries. The report raises questions not only around whether Brexit will have a commercial impact on the industry and the regulatory environment, but also whether firms will need to relocate staff or establish a presence across the EU.

Chris Cummings, Chief Executive of the Investment Association, said:

“By serving as a ‘turntable of capital’, the investment hub enables its clients to benefit from economies of scale and unrivalled investment expertise while also providing lifeblood funding for capital markets in the UK and globally.

“In the last year the UK’s investment hub has become an even more global entity and that brings direct benefits to the UK economy, including contributing to net exports, employing tens of thousands of people and fueling British business.

“The industry is now considering the ramifications of Brexit in earnest and the focus must be on seizing the opportunities that are being presented to continue to grow the UK’s investment hub globally.

“The UK asset management industry can, should and will be able to continue to serve thousands of European customers in the future and there is an exciting opportunity ahead to grow our presence in new and exciting markets the world over.”

-ENDS-

Notes to Editors:

Asset Management Survey 2015-2016 - Full survey (PDF)
Asset Management Survey 2015-2016 - Summary report (PDF)

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John Kenchington
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Linsey White
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Alex Hogan
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About the Investment Association:

• The Investment Association is the trade body that represents UK investment managers who manage over £5.7 trillion on behalf of clients.
• Our purpose is to ensure investment managers are in the best possible position to:
  • Build people’s resilience to financial adversity
  • Help people achieve their financial aspirations
  • Enable people to maintain a decent standard of living as they grow older
  • Contribute to economic growth through the efficient allocation of capital
• The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
• The UK is the second largest investment management centre in the world, after the US and manages 37% of all assets managed in Europe.