Brexit causes rethink of UK AuM forecast

EY – the consultancy which a year ago predicted a 40% rise in UK assets under management (AuM) by 2019 – is to publish a revised figure next week. The firm would not say whether the figure would be revised upwards or downwards but the revision comes in the wake of the UK’s Brexit vote. EY is not the only firm that has predicted rising assets for the UK in the recent past. In 2014, PwC predicted European AuM would rise to €25.1 trillion by 2020, with much of the growth driven by the UK. Andrew Haldane, chief economist at the Bank of England, said in April 2014 that the “age of asset management” had arrived. Recently, however, UK asset managers have been reporting outflows. Aberdeen Asset Management saw £8.9 billion leave it in the three months to June 30, with £1.5 billion withdrawn from property and £2.9 billion from equity funds. Schroders suffered £2 billion net outflows over the second quarter, and Henderson Group saw £2 billion of outflows over the first half, with pre-tax profits falling to £117 million. However, others are more optimistic about the outlook for the UK asset management industry. In a statement issued with the firm’s H1 results, Maarten Slendebroek, chief executive of Jupiter Asset Management, said while “heightened volatility” undoubtedly lies ahead, Brexit did not fundamentally change the “positive long-term growth drivers” of the sector. Nevertheless, some of the sources predicting higher AuM for UK asset managers in future may be reversing their position. ©2016 funds europe

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