Total assets under management in the UK rocketed by 20 per cent last year to a record £6.9 trillion, according to the Investment Association (IA)'s first annual Asset Management Survey since the EU referendum took place.
This compares to an average rise of eight per cent per year over the last 10 years, and means the UK remains the world's second biggest asset management centre after the US.
However, the Investment Association conceded that the “exceptional growth” witnessed in 2016 was largely a result of sterling's weakness after the Brexit referendum, as the pound sank against all other major currencies in the proceeding months.
“The asset management industry has again experienced a year of strong growth confirming the UK's place at the forefront of a competitive global market,” said IA chief executive Chris Cummings.
According to the survey, £2.6 trillion is managed in the UK on behalf of overseas investors and more than half of this is managed for non-UK European clients.
The asset management industry in the UK is now 373 per cent the size of the country's GDP.
“Our members help finance UK companies to power the wheels of innovation and increase productivity. As investors, we take an ongoing interest in the long term strategic health of the businesses we invest in and hold the management of those firms to account,” said Cummings.
“This year's report also sees an increasing focus on infrastructure investment, supporting the delivery of essential social housing, healthcare and environmental projects at the heart of communities right across the UK."
According to the IA, the asset management industry also plays a vital role in supporting the economy through job creation and employment.
Its survey showed 93,500 people are currently employed in activities related either directly or indirectly to asset management, while 37,700 are directly employed by asset management firms – equivalent to of the population of a medium-sized town in the UK.
By the end of 2016 £840bn was invested via asset managers in UK shares, £500bn in sterling corporate bonds and £160bn in UK commercial property.