London Remains Undisputed Asset Management Capital Of Europe

by Carla Johnson, Investors Offshore.com

07 August 2006

Assets under management of the UK fund management industry increased for the third year running in 2005 to GBP3.45 trillion ($6.5 trillion) according to International Financial Services London, a private sector organisation which promotes the UK's financial services industry.

According to IFSL's Fund Management report, the 7% growth in 2005 was largely due to an increase in private client funds and alternative funds such as hedge funds and property funds.

London continues to be the leading international centre for fund management, with around a quarter of its funds under management from overseas, stated the report.

UK institutional funds (pension funds, insurance companies, local authorities, etc) were the source of two-thirds of funds under management. Around 15% came from retail funds (unit and investment trusts), 11% from alternative funds (hedge funds, property funds and private equity funds) and the remaining 8% from private clients.

Fund management makes a significant contribution to the UK economy, accounting for 0.75% of GDP, generating revenue of GBP11 billion and employing over 40,000 people in 2005. Net exports of fund managers' services rose by 30% in 2005 to a record GBP2 billion.

Worldwide conventional fund management assets (pension, insurance and mutual funds), reached $55.0 trillion at the end of 2005, up 10% on the previous year and 54% on 2002. Pension assets totalled $20.6 trillion, with a further $16.6 trillion invested in insurance funds and $17.8 trillion in mutual funds.

There was also an additional $33.3 trillion in private wealth, of which around two thirds cannot be accounted for by other forms of conventional investment management.

The UK is the third largest market for fund management after the US and Japan, and is by far the biggest centre in Europe, the report said.

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