The institutional market remains dominant, but retail clients were the source of £778bn in investment at the end of 2012. The overall figure for investment funds managed in the UK is around £1.4trn.
Private clients are also a significant part of the UK market, holding assets of nearly £550bn at the end of 2012. This figure includes assets managed by private client firms such as stockbrokers and private client departments of banks and fund managers.
The UK remains a key global centre for alternative investment funds, including hedge funds, property funds and private equity funds.
Alternative funds were the source of around £500bn in 2012 or around 9% of UK funds under management with London the second largest global centre for hedge fund managers after New York and the leading centre for private equity and property funds.
The research, which was initiated as part of the UK Government’s drive to promote the UK’s fund management industry, found that fund management generates around 1% of UK GDP.
However, it also made a wider contribution to the economy through its promotion of the UK’s capital markets and from the links fund managers have with other financial services providers, such as banks, securities dealers and information providers. Total revenue of fund management activities totalled around £18.8bn in 2012, up 6% on the previous year.
Fund management firms in the UK directly employ over 50,000 people in the UK, but the prevalence of outsourcing means that this is likely to underestimate the amount of people reliant on the sector for employment.
The fund management industry was a net exporter, with exports by fund management groups reaching £4.1bn in 2012, up 22% on the previous year. The fund management sector consistently generates a trade surplus.
