AUM in UK hit record £6.8trn at end 2014

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AUM in UK hit record £6.8trn at end 2014

Assets under management in the UK saw a sixth successive year of growth, hitting a record £6.8trn at the end of 2014, Chris Cummings has said.

The chief executive of trade organisation the CityUK – and former head of the Association of Independent Financial Advisers – said: “The fund management industry is diverse and sophisticated, respected globally and has seen a remarkable recovery post-crisis. It also makes a significant contribution to the UK economy.”

His comments came as The CityUK published a 30-page report, UK Fund Management: An Attractive Proposition for International Funds, which showed the rise was 60 per cent above pre-crisis peak, and up 9.7 per cent year-on-year.

CityUK estimated that funds managed in the first half of 2015 increased by 4 per cent to 5 per cent to around £7.1trn, with the full year increase expected to top 9 per cent.

The UK has also consolidated its position as the leading global centre for fund management of international clients, with total funds managed reaching £2.5trn at the end of 2014 – up 14 per cent year-on-year.

With net exports in 2014 totalling approximately £5.2bn, the sector also generated a significant trade surplus which helped to offset the UK’s trade in goods deficit.

According to the report, retail clients’ assets accounted for £1.1trn, private clients £705bn and alternative funds £700bn.

Data at a glance

UK fund management industry: £6.8trn AUM.

The UK is the second largest global centre for fund management, with 6.6% of global funds.

57,000 people employed in the sector

40% of mid to large fund management houses in London are owned by overseas investors.

£2.5trn of funds managed in the UK are on behalf of foreign clients.

Source: The CityUK

Jorge Morley-Smith, director, head of tax, for the Investment Association, said: “The report corroborates our findings in the asset management survey we published earlier this year. They both confirm that the UK has cemented its place as a world-leading asset management centre and as an attractive fund domicile.

“This is why the government launched the Investment Management strategy two years ago – recognising the sector’s potential for delivering economic growth, and importance in serving the needs of long-term savers and investors. The government’s commitment to maintaining a competitive environment for UK investment managers and their clients is bearing fruit.”

Adviser view

Dan Clayden, director of Devon-based Clayden Associates, said: “Interestingly, there is always a time lag behind asset management data. If we looked at the market now we may be a bit surprised at these figures, but generally the market looks well-placed to continue the recovery.

“It is still slow, however, which is why we have seen the market move up steadily and go back down – a reality check for equity investors. However, with interest rates looking likely to rise, though not a good thing, is a good indicator that the economy is recovering.”