How UK fund managers differ from their foreign rivals

Michael Bow
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(Source: Reuters)

UK fund managers are going against the grain somewhat on where the next big growth driver for the industry will emerge, according to a major new study out today.

Despite the upheaval set to be wrought by Chancellor George Osborne’s pensions overhaul next April, fund managers across Square Mile are showing a buccaneering spirit for expansion worthy of the British conglomerates of old.

Figures from State Street released today show that UK fund houses are more likely to look abroad for growth compared to every one else.

A total of 57 per cent of UK fund managers plan to start flogging their wares to people in new territories between now and 2017 – compared to 47 per cent of firms from the rest of the world.

The UK scores even higher than big US asset managers, which are closer to the global average with 48 per cent planning to push into new territories in the next three years.

The poll, which asked 300 senior fund executives at investment houses across the world, examined how large fund managers (running between $5bn and upwards of $500bn) are planning to grow their businesses over the short to medium term.

A scepticism towards so-called multi-asset (a fund made up of stocks, bonds, alternatives and currencies compared to just stocks, or bonds, or currencies) was also more prevalent among British firms.

About one in two fund houses (53 per cent) had faith in multi-asset funds acting as the main driver of growth in future but this was higher for non-UK fund managers at 67 per cent.

Traditionalists to the end, 30 per cent said of UK respondents said active stock picking funds would be a primary driver of growth for their business – almost double the level of non-UK firms (17 per cent) which cited traditional active stock picking.