London’s position as Europe’s premier financial hub was laid bare again today with the latest statistics on the UK’s dominant fund management industry.
The Investment Association (IA), which represents investment firms based in the UK, found there are more assets under management (AUM) in the UK than France, Germany and Italy combined, and nearly 100,000 jobs across the country depend on the industry.
The total size of AUM in the UK stood at €6.1 trillion (£5.3 trillion in today's prices) at the end of 2015 – unchanged on one year before. France, the next largest European market, manages €3.3 trillion, by contrast, while Germany comes in at just €1.6 trillion.
The numbers also revealed the extent to which the UK punches above its weight in attracting overseas clients. More than one-third of the financial products under the stewardship of UK outfits belonged to overseas clients and 37 per cent of all European stocks, shares, bonds, cash and property were managed in the UK.
The international dominance of London, which falls behind only the US as a home for financial assets, has prompted both fears about the prospect of Brexit and hope that London can retain its European crown.
“In the last year, the UK’s investment hub has become an even more global entity,” said IA chief executive Chris Cummings. “That brings direct benefits to the UK economy, including contributing to net exports, employing tens of thousands of people and fuelling British business.”
He added: “The industry is now considering the ramifications of Brexit in earnest and the focus must be on seizing the opportunities that are being presented to continue to grow the UK’s investment hub globally.”
The position of the City has been brought into question in the wake of the EU referendum and speculation the government could be considering a “hard Brexit” option which might strip financial services of their passporting rights. However, recent figures showed 8,000 EU businesses rely on one of the various passports which allow them to do business in the UK, compared to 5,500 UK-based firms that operate in Europe, raising hopes a deal can be struck.