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The Industry in Figures

UK assets under management and funds under management are at record levels, and the UK retains its position as the second largest asset management centre in the world after the US.

Institutional and retail asset allocation is characterised by increasing diversification, both in asset class and geographic terms, and a continuing move away from the equity-dominated culture of the 1990s.

IMA fund flow analysis shows retail investors strongly focused on a set of objectives relating to income, capital preservation and asset allocation.

Overseas clients account for 40% of total assets under management, and a significant part of the asset base (£721bn) is managed on behalf of overseas-domiciled funds. In a comparative EU perspective, the UK is fifth in the fund domicile league table, accounting for 11% of total funds under management.

The industry remains comparatively unconcentrated, with the top ten firms managing 54% of total assets and a long tail of smaller asset management firms. Investment fund flows are showing signs of greater concentration at the level of the top 100 funds.


Chapter 1 - Industry Overview
Chapter 2 - Serving Client Needs
Chapter 3 - UK Institutional Client Market
Chapter 4 - UK Fund Market
Chapter 5 - International Dimension
Chapter 6 - Operational and Strucutural Issues

Industry Overview

  • IMA members manage a total of £4.5trn assets in the UK, with the wider industry estimated at £5.2trn

    Chart 1: Total assets under management in the UK and in UK authorised funds (2005–2012)   Figure 2: Wider asset management industry
  • Institutional clients represented 81% of the total; retail and private clients accounted for 17.4% and 1.6%, respectively

    Chart 4: Assets managed in the UK by client type      
  • Passively managed assets remained at 22% of total UK assets under management

    Chart 7: Active and passive assets as a proportion of total UK assets under management (2006–2012)     
  • Of the £4.5trn, the largest proportion was invested in equities (42%), closely followed by fixed income (37%)

    Chart 10: Overall allocation of UK-managed assets (2007–2012)

  • UK equities decreased to 33% of the overall equity allocation, continuing a long-term decline

    Chart 13: UK-managed equities by region (2006–2012)
  • Of the 37% invested in fixed income, the largest share was held in £ Sterling Corporate (26%), followed by UK Government bonds (18%)  

    Chart 15: UK managed fixed income allocation split by insurance vs non-insurance parent

UK Institutional Client Market

  • IMA members manage an estimated £2.5trn on behalf of UK institutional clients, of which third party mandates amount to £1.7trn

    Chart 19:  UK institutional market by client type
  • Pension funds represent the largest third party client type with 69%, followed by insurance companies and sub-advisory business with 11% and 6.7%, respectively

    Chart 20: Third party UK institutional market by client type
  • Total UK pension fund assets stood at £2.0trn, with the DB/DC split at 64% / 36%

    Figure 5: The UK pensions landscape
  • Specialist mandates account for 68% of the total, and would increase to 87% if LDI business was excluded 

    Chart 21: UK third party institutional client mandates

  • Within specialist mandates, the largest proportion is focused on equities (40%) followed by fixed income (38%) 

    Chart 22: Specialist mandate breakdown by asset class

  • Of the 40% in specialist equity mandates, global equities dominate with 39%. UK equities represent 29%

    Chart 25: Geographical equity allocation of specialist mandates by client types

  • Within specialist fixed income mandates, the largest category is again £ Sterling Corporate (30%), followed by UK index-linked gilts (20%)

    Chart 25:  Fixed income specialist mandates by client type


UK Fund Market

  • UK authorised funds represent £660bn.  Including overseas-domiciled funds whose assets are managed in the UK would increase the total size of UK-managed funds to an estimated £1.4trn

    Chart 33: Industry funds under management (2001 - 2012)

  • Of the £660bn in UK authorised funds, equity funds account for the largest share (52%), followed by fixed income (18%) and mixed asset funds (14%) 

    Chart 36:  Funds under management by fund/asset type

  • Total net sales of UK authorised funds stand at £22bn, driven primarily by retail investors (£14bn)

    Chart 45:  Household saving into funds as percentage of disposable income (1993-2012)

  • Chart 42:  Net acquisition of currency and deposits of UK households and net retail sales of UK authorised funds vs Bank of England base rate (2003-2012)

  • Interest in mixed asset funds fell compared to previous years, (£2.7bn of net retail sales) while fixed income and equity income funds attracted record net retail inflows 

    Chart 44: Net retail sales by investment objective (1993-2012)  Chart 38: Net retail sales (1993-2012)

  • The UK continues to have a considerably higher equity allocation compared to the European average (59% vs 29% of UCITS funds)

    Chart 69:  Breakdown of funds under management by funds domicile, selected countries

International Dimension

  • As an asset management location the UK continued to solidify its position as the largest European, and the second largest asset management centre in the world after the US, representing 36% of European assets under management

    Figure 7: Assets under management in Europe (December 2011)

  • IMA members manage 40% of total UK assets on behalf of overseas clients

    Figure 8: International dimensions of the UK asset management industry

  • UK-headquartered firms managed 47% of total UK assets under management, compared with 41% by North American and 10% by European groups 

    Chart 72:  UK assets under management by region of parent group headquarters (2003-2012)

  • An estimated £721bn in overseas-domiciled funds (45%) is managed in the UK, with Dublin and Luxembourg as the most popular locations (71%). The UK continues to rank fifth as a European fund domicile 

    Figure 10: European investment funds by country of domicile (December 2012)

  • IMA members and the groups of which they are part have an estimated £42trn in assets under management worldwide

Operational and Structural Issues

  • Total industry revenue increased to £13bn (2011: £12bn) while costs have grown to £8.3bn (an increase of 2.4% on a matched basis). Expressed as a proportion of average assets under management, this equates to 30bps and 19bps, respectively

    Chart 80: Industry net revenue vs revenue and costs as percentage of average assets under management (2006–2012)

  • The total direct industry headcount has increased to 30,800 (2011: 29,500). Of these, over 13% are foreign nationals 

    Chart 84: Industry headcount estimate (2006–2012)

  • The largest staff segments continue to be represented by core asset management activities, although the recent period has also seen growth in operations, fund administration and compliance functions

    Chart 85: Direct employment by staff segment (2008-2012)

  • The UK industry continues to be very unconcentrated, with the top five and top 10 largest firms accounting for 35% and 54% of total UK assets, respectively

  • The Herfindahl-Hirschman Index (HHI) is a widely-used measure of industry concentration.  As at June 2012, the asset management industry scored 415, in line with the 422 in 2011

    Chart 88: Market share of largest firms by UK assets under management vs HHI (June 2003–2012)

  • Independent asset managers continued  to represent 37% of total UK assets under management, compared with insurance companies at 29% and banks at 17% 

    Chart 90:  Breakdown of UK AUM by parent type (2003-2012)

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