UK fund management assets rise to £9.4 trillion

Baillie Gifford

Assets under management held by the UK Investment Association’s 270 member firms grew to £9.4 trillion by the end of 2020, an increase of 11% on the previous year, according to the IA’s latest Investment Management Survey (IMS).

The survey shows that the UK remains the second largest investment management centre in the world behind the United States, and by far the largest investment management centre in Europe with a market share of 37%.

The UK’s share of the European market is larger than the combined total of France, Germany and Switzerland.

The UK also remains an attractive hub for overseas investors.

By the end of 2020, overseas client assets accounted for 44% of total assets under management (AUM), equivalent to £4.2 trillion.

“The growth in assets managed according to responsible investment criteria is one of the standout developments of 2020,” said the IA.

“The green agenda continues to rise in prominence and investment managers have committed to support the transition to net zero emissions.

“49% of total assets managed by IA member firms apply ESG integration, up from 37% in 2019.

“The proportion of assets subject to sustainability focused criteria almost doubled in 2020 to 2.6% of total assets.

“Retail investor appetite for environmentally conscious funds has been building over recent years but the pandemic brought social concerns to the fore, as net retail sales to responsible investment (RI) funds accelerated through 2020 to reach £11.7 billion, a third of overall sales.

“FUM (funds under management) in responsible investment funds grew by 60% over 2020, pushed higher by strong sales and new fund launches.”

Investment Association CEO Chris Cummings said: “The investment management industry demonstrated its long termism through the pandemic by supporting the companies it invests in.

“The swift action of the central banks supported the global economy and the industry rallied to the cause injecting over £22bn into businesses to help them ride out the storm.

“But the pandemic wasn’t the only story of 2020.

“We also saw the acceleration towards a greener economy as retail investors placed record funds into responsible and sustainable investments, seeing a new generation embracing investing.

“With the final transition out of the EU completed, the industry is well-set to build on its world class reputation which has already led to it managing £9.4trn of international clients’ funds.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.