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UK funds industry pulls through Covid with record AUM intact

British map British flagUK investment management has withstood the disruption of Brexit and even the turmoil of coronavirus to achieve asset levels almost back where they were before the Covid-19-pandemic.

The Investment Association (IA) estimates that assets under management (AUM) among its member firms are almost where they were at the end of 2019 - which at £8.5 trillion (€9.2 trillion) was a record for the industry and means firms have defied the unprecedented falls in global markets this year.

Chris Cummings, chief executive of the IA, said the figure was “a mark of the industry’s resilience”.

The IA published the figure in an annual ‘state of the industry’ report, which also revealed:

  • The UK remains the second largest investment management centre in the world after the US, and “by far” the largest investment management centre in Europe with AUM larger than the next largest three European centres combined (France, Germany, Switzerland);
  • The industry manages £3.6 trillion (43% of total assets) on behalf of overseas clients, mainly Europe, although assets from clients in North America and Asia saw the highest year-on-year increases in 2019;
  • Since March 2020, over £14 billion has been invested in publicly listed UK companies.
  • At the end of 2019, investment managers had invested £1.6 trillion in the UK economy which included £950 billion in UK equities and £450 billion in corporate bonds.

The IA said investment in infrastructure projects will become more important in the context of Covid-19 and constrained government finances. Total investments in UK infrastructure by IA member firms have risen to £45 billion compared to £35 billion in 2018.

Figures also show that responsible investment has emerged as the “standout opportunity”. For example, persistent sales to responsible investment funds were notable, the IA said, during the height of the pandemic when record outflows from the fund market in March were followed by a recovery that saw record inflows of almost £1 billion into responsible investment funds in April.

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