UK funds under management reach a record £4.8 trillion, but down in 2011

Assets under management of fund managers in the UK increased by 17% in 2010, to a record £4.8 trillion according our annual Fund Management report. This was 15% above the pre-crisis peak in 2007. The growth in funds for the second year running resulted from both the recovery in equity markets during the year as well as an inflow of new funds. Early indicators for 2011 show that despite a steady inflow of new funds, the value of UK domiciled retail funds under management declined 3% in the first 8 months of the year due to volatile market conditions.

Institutional funds made up nearly two-thirds of UK funds under management at the end of 2010. A further 17% came from retail funds, 10% alternative funds and the remainder from private clients. Over a third of funds, or some £1.6 trillion, came from overseas clients. London is central to the UK’s strong international position. Other large fund management centres include Edinburgh, Liverpool, Glasgow, Aberdeen and Manchester. Foreign firms operating in the UK manage more than a half of UK funds.

Following two years of decline, fund management margins edged up in 2010 to 34% from 33% a year earlier, still below the 37% peak in 2007. Revenue of UK fund management activities totalled £16.1bn in 2010, up around a quarter on the previous year.”

Global trends: Worldwide conventional investment management assets increased by 10% in 2010 to a record $79.3 trillion (see table below). Pension assets accounted for $29.9 trillion of the total, with a further $24.7 trillion in mutual funds and $24.6 trillion in insurance funds. Together with alternative funds and private wealth funds, assets of the global fund management industry totalled $117 trillion.

Sources of global conventional assets under management, 2010
$ billion	Pensions	Insurance	Mutual funds	Total	% of total
US	17,371	6,431	11,821	35,623	44.9
UK	2,926	2,736	854	6,516	8.2
Japan	1,388	3,958	786	6,132	7.7
France	232	2,509	1,617	4,358	5.5
Germany	171	1,384	334	1,889	2.3
Others	7,849	7,616	9,287	24,752	31.2
Total	29,937	24,634	24,699	79,270	100.0
* figures only show domestically sourced funds for each country without regard to where the funds are managed. Source: TheCityUK estimates