The UK investment management industry has seen its assets under management (AUM) grow to £9.1trn (€10.8trn), according to the Investment Association (IA) – this includes £2.9trn of directly managed pension fund assets.
This is on behalf of both UK and overseas pension funds and a further £1.1trn for insurance clients, which includes the pensions-related assets of insurance companies.
IA said that investment in debt and equity in UK companies reached £1.18trn in 2023 (£1.16trn in 2022). Meanwhile, UK-listed companies account for a fifth (£780bn) of equity assets under management — second only to the share of assets held in North American companies (35%).
The association said that UK investment management “remains a global success story”, second only in size to the US.
It said that 49% of UK assets are managed on behalf of overseas clients, representing £4.5trn. This includes £2.5trn and £925bn on behalf of European and American clients, respectively.
Assets managed for Middle Eastern clients were among the fastest growing in 2023, with assets under management increasing by 15% to £275bn in 2023 (£245bn in 2022).
Retail investors now hold just over a quarter of assets under management (26%), this is a notable increase from 20% in 2020.
This shift has been driven by market performance and the growth in interest in investing during the pandemic. The share of AUM managed on behalf of retail investors has held steady through the turbulent markets of 2022 and rising cash savings rates in 2023.
Chris Cummings, the association’s chief executive officer, said: “Investment is the powerhouse of the economy that provides capital to the businesses and infrastructure projects which drive growth. Through these investments and the long-term returns they generate, our industry helps people in the UK and around the world achieve their goals and enjoy financial security into retirement.”
Cummings said the figures demonstrate an industry that has proven resilient in the face of a challenging economic backdrop, with AUM growing to £9.1trn in 2023, £1.18trn of which is invested in UK companies through equities and bonds.
However, he added it is “critical” that government, industry and regulators continue to work together closely to boost growth and innovation, and ensure the UK investment management industry retains its leading position.
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