The UK investment management industry saw growth in assets under management to £9.1 trillion in 2023 from £8.8 trillion in 2022, according to the latest annual figures from the UK’s Investment Association (IA).
UK investment managers’ investment in the debt and equity of UK companies reached £1.18 trillion in 2023, up from £1.16 trillion in 2022.
However, UK listed companies accounted for only 20% (£780 billion) of equity assets under management for UK investment managers — second to the share of assets held in North American companies (35%).
UK investment managers handled £2.9 trillion of assets on behalf of UK and overseas pension funds and a further £1.1 trillion for insurance clients, which includes the pensions-related assets of insurance companies.
The IA said 84% of UK households have a private pension “which typically involves the services of an investment manager, an increase from 75% a decade ago.”
The IA said: “UK investment management industry also remains a global success story, second only in size to the United States.
“Almost half (49%) of UK assets are managed on behalf of overseas clients, representing £4.5 trillion.
“This includes £2.5 trillion and £925 billion on behalf of European and American clients, respectively.
“Assets managed for Middle Eastern clients were among the fastest growing in 2023, with assets under management increasing by 15% to £275 billion in 2023 (£245 billion, 2022).
“Retail investors now hold just over a quarter of assets under management (26%), this is a notable increase from 20% in 2020.
“This shift has been driven by market performance and the growth in interest in investing during the pandemic.
“The share of assets under management on behalf of retail investors has held steady through the turbulent markets of 2022 and rising cash savings rates in 2023.”
Investment Association CEO Chris Cummings said: “Investment is the powerhouse of the economy that provides capital to the businesses and infrastructure projects which drive growth.
“Through these investments and the long-term returns they generate, our industry helps people in the UK and around the world achieve their goals and enjoy financial security into retirement.
“Today’s figures demonstrate an industry which has proven resilient in the face of a challenging economic backdrop, with assets under management growing to £9.1 trillion in 2023, £1.18 trillion of which is invested in the UK companies through equities and bonds.
“However, it is critical that government, industry and the regulator continue to work together closely to boost growth and innovation, and ensure the UK investment management industry retains its leading position.”