UK assets under management are set to reach a record £7.44 trillion by the end of 2015, well above the pre-recession peak.
Funds managed in the UK are predicted to increase by nine per cent this year, the seventh successive year of growth, according to data from TheCityUK, which represents a slight slow-down from the 9.7 per cent growth in 2014, thanks to emerging markets (EM) turbulence.
Chris Cummings, chief executive of TheCityUK, told City A.M. he was confident for the future, and believed the impact of market volatility had been limited.
If you take a three year view, the trend line will continue to increase, there will be some slower growth to begin with, but it will pick up again after couple years. Some of the steam has come out of the market, but [nine per cent] growth is still important, and still steady.
In fact, Cummings said part of the reason for the UK's success was EM volatility: “We have a global reputation for excellence, in uncertain times that always attracts investors who want certainty. The UK is seen as a centre for excellence, for safer, more professional management, which is why the in increasing numbers of international clients coming to the UK have been so important, and a major driver of growth.”
The UK managed a record £2.5 trillion of assets for international clients last year – accounting for around a third of the total funds managed – up approximately 14 per cent year on year.
Saker Nusseibeh, chief executive at Hermes Investment Management, agreed, telling City A.M. he thought emerging markets have reached their bottom: “People don't think returns will be negative, EMs are attractive from here on. There's a constructive case for growth here.”
He added that the Asian markets had much to offer UK fund managers: “Institutions and individuals in Asia have assets to invest. China is slowing down, but from a high point and still generating wealth people want to invest. We will be in position to benefit from this trend.”
Martin Gilbert, chief executive of Aberdeen Asset Management, said to City A.M. that “this expansion is likely to continue as there is an increased onus on individuals around the world to save for their retirement.”
The comes as the Financial Conduct Authority announces a probe into competition among asset managers, set to launch next year and report early in 2017. It will be looking for value for money among both institutional and retail asset managers, as well as looking at whether managers can control costs "along the value chain", and whether investment consultants affect on competition.