UK assets under management to hit £1 trillion

THE total level of assets under management in Britain will bounce back from a poor 2011 to grow by more than 10 per cent to £851bn this year, according to research published today.

Assets will rise 10.7 per cent this year, providing concern over Eurozone sovereign debt does not trigger another major sell-off in equities, according to the Ernst & Young ITEM Club outlook for financial services.

The rate of growth will settle at around seven per cent a year by 2014-15 and assets will top £1 trillion by the middle of the decade, the report says.

It picked out absolute return strategies as likely to be popular in the high-return area.

“Although disrupted during the 2008 financial crisis and the initial Eurozone problems in 2011, absolute return strategies have generally avoided the performance setbacks experienced by other forms of active management, whose previous appeal to investors has also been eroded by greater transparency over total expenses.”

The growth in total assets expected this year is well ahead of the 0.4 per cent achieved last year but well below the level achieved in 2010, when assets jumped by 26 per cent.