Assets under management (AUM) by UK-based fund managers reached £10tn in 2024, a 10% year-on-year increase. The same year also marked the first time that more than half (51%) of all UK-managed assets were sourced from overseas clients, underlining the UK’s role as one of the world’s leading hubs for investment management, according to new research from TheCityUK.
The report, ‘The asset management landscape: global insights and UK strengths’, offers a data-driven assessment of the sector’s performance, structure, and evolving client base in the UK and globally. The sector generated an estimated £17.5bn of gross value added (GVA) in 2024, according to TheCityUK’s estimate. That equates to nearly 6% of total UK financial and related professional services output. The sector also employed 74,000 people across the country in 2023.
Globally, AUM reached almost $300tn – a 10% year-on-year increase. The UK’s standing as Europe’s leading hub for fund management continues, with over one-third (35%) of total European AUM held in the UK, making it the dominant market by a wide margin, significantly ahead of France (16.1%) and Switzerland (11.2%).
According to the report, net exports of fund management services grew by an average of 12.3% per year between 2013 and 2023, driven by strong growth in the sector’s gross exports.
Anjalika Bardalai, Chief Economist & Director, Economic Research, TheCityUK, said: “The asset management sector is a crucial part of the UK-based financial services ecosystem and has demonstrated remarkable resilience in the face of a rapidly changing global environment. In recent years it has successfully navigated major challenges, from geopolitical upheavals to shifting investor expectations, while continuing to play a key role in supporting economic stability and growth.’’
“Our latest findings highlight how the UK-based sector’s international orientation has continued to grow, reinforcing the role of the UK as a preeminent global hub for asset management services. Our new research also analyses how global asset allocations have changed in recent years—with potential implications for cross-border capital flows and macro-financial stability.”
Key UK findings from the report include:
- Institutional clients accounted for almost three quarters of AUM in 2024, although retail AUM have increased steadily over the past decade.
- Alternative funds represented 17% of UK AUM (£1.7tn).
- UK-based hedge fund AUM and private equity investment both ranked second globally (after the US).
- The UK is one of the world’s three largest pension markets, alongside the US and Japan.
- Insurance sector assets rose by 2.8% year on year in 2023. Insurers’ portfolios remain dominated by fixed income (over 50% of general-account assets), but allocations to alternatives such as private credit, private equity, securitisations and infrastructure are increasing.
Global findings include:
- Global AUM totalled $296.9trn in 2023, comprising conventional funds at $166.6trn, alternative funds –hedge funds, private equity, exchange traded funds and Sovereign Wealth Funds (SWFs) – at $37.4tn, private wealth at $86.8trn, and charitable trusts, endowments and foundations at $6.1trn.
- Globally, hedge fund AUM has risen by 168% over the past decade, while SWFs’ assets reached $12.7trn in 2023, growing at an annual average rate of 7.5% since 2014.
- Global mutual fund assets rose by 14.6% year on year in 2023, rebounding from a 15.5% decline in 2022. Equity funds remained the largest category, followed by bond funds, balanced/mixed funds and money market funds.
- Global exchange traded funds (ETFs) assets grew by 26.1% year on year in 2023, with the US accounting for 70.1% of the total, followed by Europe and Asia-Pacific.
- Global High Net Worth Individual (HNWI) wealth grew by 4.6% year on year in 2023 and remained concentrated in North America, Asia-Pacific and Europe.