UK funds sector falling behind the global pack

Michael Bow
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THE UK fund management industry is lagging the rest of the world in the battle to attract investors’ cash, a study showed yesterday.

Britain was one of only two major territories in the world to see an outflow of money from funds last year, figures from Boston Consulting Group show. The other was France.

Money flowing out of UK-based funds totalled one per cent of the UK’s assets under management.

The rest of the world – including the US, Germany, Italy, Spain, Japan and India – all saw investors add to the net inflow of funds.

Spain posted the strongest growth, with inflows of 17.1 per cent of assets under management.

The UK’s dismal performance comes two years after chancellor George Osborne launched an initiative to make the UK the global leader in fund management.

Overall money managers globally enjoyed their best year for profits since the 2007 financial crash but mainly due to asset growth rather than inflows.

Profits rose seven per cent to $102bn and assets under management increased eight per cent to $74 trillion.

“The 2014 performance shows that the industry has moved beyond the dynamics of the post-crisis period but also that it faces a challenging new environment,” said BCG partner Gary Shub said.

In the UK, growing pressure to make fees more transparent appears to have driven down prices paid by retail investors: fees fell 10 per cent to 54.6 percentage points to 60.7pp.

Institutional fees were flat at 17.7 percentage points.

BlackRock had the best flows in Europe in 2014, followed by UBS.