Global funds under management reach $84trn – report
Conventional assets under management of the global fund management industry climbed by 5% in the first nine months of 2012 to a record $84.1trn, some 13% above the pre-crisis peak.
According to the 2012 edition of TheCityUK’s Fund Management Report, funds are likely to reach $85.2trn by the end of the year. TheCityUK is a body that promotes the financial services sector in London.
Pension assets account for nearly 40% of total funds, with the remainder split almost equally between mutual and insurance funds. Together with alternative assets and funds of wealthy individuals, total assets of the global fund management industry are around $120trn.
The US remains by far the biggest source of funds, accounting for nearly a half of all conventional assets under management, according to the report. The UK is the second largest centre in the world, and by far the largest in Europe, with 8% of the total, closely followed by Japan.
Raquel Hughes, Strategy Director at TheCityUK, said: “On the whole, the global fund management industry has recovered quickly from the sharp fall in assets under management that occurred at the outset of the credit crisis. Most of this recovery has come from market performance rather than new inflows.
“We have found that the longer term effects of the economic slowdown include more cautious investment strategies and more diversification across asset classes and geographical regions. There is also a worldwide trend for fund managers to operate independently of banks and insurance companies.”
The UK fund management industry was responsible for a record £5.1trn of funds at the end of 2011. This was up 5% during the year and follows double digit growth in the two previous years.
TheCityUK estimates that UK funds under management increased by a further 4% in the first nine months of 2012, with the full year increase likely to reach around 5%. Over a third of UK funds, or some £1.9trn, came from overseas clients, a higher proportion than in most other countries. Foreign firms operating in the UK manage more than a half of UK funds.
The financial and professional services sector currently accounts for 13.5% of UK GDP. The sector employs over two million people, more than 68% of whom work outside London, and underpins the businesses that drive jobs and growth.
Fund management generated a UK trade surplus of some £4.3bn in 2011. The sector accounts for around 1% of UK GDP and employees some 60,000 people. The full report is available at www.thecityuk.com.