Domestic fund groups have seen the assets they manage for European investors increase 29% over the past year, leading the Investment Association (IA) to call for a Brexit deal that protects UK asset managers and savers.
According to figures from the IA’s 2017/18 asset management report, assets under management (AUM) from overseas clients increased by almost a fifth to £3.1trn (€3.4trn, $4trn). More than half of this, £1.8trn, was from European investors – a 29% increase from 2016/17.
Overall, the UK manages more than a third, 35%, of European AUM, making it larger than the next three countries – Germany, France and Switzerland – combined, the report said.
The IA’s UK members manage £7.7trn of assets on behalf of clients globally, an increase of 11% from the year before.
A Brexit deal
The IA said its findings brought into sharp focus the need for a Brexit deal that protects the domestic funds industry and the savers it runs money for.
Chris Cummings, chief executive of the IA (pictured), said: “The clear value the European market brings to the UK asset management industry underlines the urgent need for a Brexit deal to be completed by March 2019 which protects our industry, and more importantly, the savings of millions of people right across Europe.”
Domestic contribution
The report also shines a light on the contribution of the UK asset management industry to the domestic economy.
It found asset managers invested £1.7trn in the UK economy across different asset classes in 2017. This includes approximately £920bn of UK equity holdings, representing a third of the FTSE.
At the end of 2017, IA members had invested £40bn in UK infrastructure, a 40% increase from £29bn the year before. Meanwhile, £31bn was channelled into private markets via direct lending.
The asset management industry also makes an important contribution to export earnings, responsible for 6% of UK net service exports.
The industry now supports about 100,000 jobs across the UK, the IA said.
Cummings added: “The IA’s definitive overview of asset management illustrates that it is an exciting time for our industry. We are playing an increasingly significant role in the UK economy having invested £1.7trn, providing vital funding for UK businesses and infrastructure, and supporting 100,000 jobs around the country.”
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