UK ASSET MANAGEMENT MARKET - GROWTH, TRENDS, AND FORECAST (2019 - 2024)

The United Kingdom Asset Management Market is segmented by Asset Class, Source of Funds, Type of Asset Management Firms, and Revenue by Type of Asset Management Firms.

Market Snapshot

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Study Period:

2012-2024

Base Year:

2018

Key Players:

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Market Overview

The UK asset management market registered a CAGR of 2.87% during the period, 2012 – 2017.

  • The UK dominated the European market, in terms of VC funding, and investments in the UK since the Brexit vote do not appear to be suffered. In 2018, investors invested around EUR 6.5 billion into UK-based startups across 1,423 deals, narrowly missing 2017's high of EUR 6.7 billion, in terms of capital invested. In the first month of 2019, VC registered more than 30 completed transactions worth EUR 253 million.
  • Total assets managed in the UK increased by 11% during 2017, ending the year at a record of GBP 7.7 trillion. This represents around 85% of the wider asset management industry, which reached an estimated GBP 9.1 trillion at the end of 2017. Additionally, GBP 1.7 trillion was invested in the UK economy via equities and corporate bonds and in domestic commercial property and infrastructure projects.
  • The UK remains the largest center of asset under management outside of the US and largest center of asset under management in Europe, where it accounts for 35% of all assets under management. The UK asset managers manage GBP 3.1 trillion for overseas clients, which translates to earnings representing 6% of net services exports. Assets managed for European clients increased by almost 30% year-on-year, bolstered by extremely strong flows into EU UCITS (Undertakings for Collective Investment in Transferable Securities) funds in 2017.
  • Asset management industry is under pressure, due to margin squeeze, an ever increasing regulatory burden, macro-economic and political change, such as Brexit, and disruptive business models, such as ‘robo-advice’. The expectations of clients in this environment change quickly and place even greater pressure on the industry to respond to their evolving needs.

Scope of the Report

The UK asset management market covers different segments of asset management, like fixed income, equities, pension, alternative, and hybrid fund, along with insights on return generated by different asset classes and asset management process flow.

Asset Class (2012-2018)
Equity
Fixed Income
Alternative Investment
Multi Asset
Others
Source of Funds (2012-2018)
Pension Funds
Retail Investors
Institutional Investors
Insurance Companies
Government/Sovereign Wealth Fund
Others
Type of Asset Management Firms (2012-2018)
Large Financial Institutions/Bulge Brackets Banks
Mutual Funds and ETFs
Private Equity and Venture Capital
Fixed Income Funds
Hedge Funds
Managed Pension Funds
Others

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Key Market Trends

Growth in ESG Category is Driving the UK to Top Spot, Globally

The top drivers of environmental, social, and governance (ESG) decision making across all issuers and the majority of the investors are financial returns and tax incentives. Among issuers, the UK and Canada buck this trend, particularly among those with turnover exceeding USD 10 billion in Europe. In the United Kingdom, 65.1% issuers disclosed that they have ESG in place. Company policies/strategies/ESG goals are also important factors for issuers, whereas regulation remains a key driver for asset managers. Disclosure of ESG strategy and policy is an important factor nowadays. Additionally, the UK topped in ESG strategy, globally, with 92.9% penetration.

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UK Asset and Wealth Management Deal Dynamics 2019 is Driving the Market

As pressure on fees, costs and traditional sources of revenue intensifies, merger and acquisition (M&A) may help business to break free from the margin squeeze. Yet, with client expectations rising and acquisition multiples still high, deal planning, targeting, and integration have to be spot on. Deal activities in the UK asset and wealth management market continued their growth in 2018, with overall deal volumes increasing by 27% from 2017. Total deal values have, however, reduced reflecting the absence of the ‘mega-mergers’ of 2016/2017. Deal activity during 2018 has been fuelled by AWM firms looking to build competitive scale, expand product ranges through both vertical integration, and by acquiring specialist capabilities. This includes investing in digital technologies, as firms look to remain ahead of the curve or to access new routes to market. While 2019 has plenty of uncertainty, the dynamics of the sector continue to prove attractive and expect deal volumes to remain at the level seen last year. The growth within the UK and global asset and wealth management (AWM) remains strong. Yet, margins are being squeezed, owing to increasing research, reporting, and technology investment costs and the challenge of justifying and sustaining fee levels. For active managers, the pressures are heightened by the growing competition from passives and newer low-fee products, like smart beta, along with performance focused active management charging models. Additionally, this is a market where merger and acquisition may continue to offer valuable synergies and economies of scale.

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Competitive Landscape

The UK asset management market is highly competitive, with the presence of major international players. The market studied presents opportunities for growth during the forecast period, which is expected to further drive the market competition. With multiple domestic players holding significant shares, the market studied is competitive.

Major Players

  1. HSBC Global Asset Management
  2. Baillie Gifford
  3. Royal London Asset Management
  4. Man Group
  5. Newton Investment Management

* Complete list of players covered available in the table of contents below

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Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET INSIGHTS AND DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Dynamics

      1. 4.2.1 Drivers

      2. 4.2.2 Restraints

      3. 4.2.3 Opportunities

    3. 4.3 Technological Innovations

    4. 4.4 Industry Policies and Government Regulations

    5. 4.5 Trends Disrupting the Market

    6. 4.6 Insights on Return Generated by Different Asset Classes

    7. 4.7 Asset Management Process Flow

    8. 4.8 Insights on Fee Structure and Operating Cost

  5. 5. MARKET SEGMENTATION

    1. 5.1 Asset Class (2012-2018)

      1. 5.1.1 Equity

      2. 5.1.2 Fixed Income

      3. 5.1.3 Alternative Investment

      4. 5.1.4 Multi Asset

      5. 5.1.5 Others

    2. 5.2 Source of Funds (2012-2018)

      1. 5.2.1 Pension Funds

      2. 5.2.2 Retail Investors

      3. 5.2.3 Institutional Investors

      4. 5.2.4 Insurance Companies

      5. 5.2.5 Government/Sovereign Wealth Fund

      6. 5.2.6 Others

    3. 5.3 Type of Asset Management Firms (2012-2018)

      1. 5.3.1 Large Financial Institutions/Bulge Brackets Banks

      2. 5.3.2 Mutual Funds and ETFs

      3. 5.3.3 Private Equity and Venture Capital

      4. 5.3.4 Fixed Income Funds

      5. 5.3.5 Hedge Funds

      6. 5.3.6 Managed Pension Funds

      7. 5.3.7 Others

    4. 5.4 Revenue By Type of Asset Management Firms (2015-2024)

  6. 6. COMPANY PROFILES

    1. 6.1 Legal and General Investment Management

    2. 6.2 Insight Investment

    3. 6.3 Schroders

    4. 6.4 Aviva Investors

    5. 6.5 M&G Investments

    6. 6.6 HSBC Global Asset Management

    7. 6.7 Baillie Gifford

    8. 6.8 Royal London Asset Management

    9. 6.9 Man Group

    10. 6.10 Newton Investment Management*

  7. *List Not Exhaustive
  8. 7. FUTURE OF THE UK ASSET MANAGEMENT MARKET

  9. 8. APPENDIX

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