Market Trends of UK Asset Management Industry
Growth in ESG Category is Driving the UK to Top Spot, Globally
Environmental, social, and governance (ESG) decisions are mostly made based on financial returns and tax incentives. This is true for all issuers and most investors. When it comes to issuers, the UK and Canada go against this trend, especially when it comes to those with more than USD 10 billion in sales in Europe. In the United Kingdom, 65.1% of issuers disclosed that they have an ESG in place. For issuers, company policies, strategies, and ESG goals are also important. For asset managers, regulation is still the most important factor. Disclosure of ESG strategy and policy is an important factor nowadays. Furthermore, the United Kingdom led the global ESG strategy with 92.9% penetration.
Increase in Mergers and Acquisitions in Asset Management Market
During the period in question, mergers and acquisitions (M&A) between firms in the asset management market are expected to rise. 68% of asset managers expect M&A deal volume to rise in the next 12 months. This rise in M&A activity in the UK asset management market is caused by several things. One is the ongoing consolidation within the industry. As larger firms get even bigger, they are looking for ways to grow their market share through acquisition. This is especially true in developed markets such as North America and Europe, where there is less opportunity for organic growth.
Another factor driving M&A activity is the increasing pressure on margins. With competition intensifying and fee compression continuing, many firms are looking to achieve scale through M&A to reduce costs. In addition, many firms are looking to add new capabilities through M&A to stay ahead of the curve and meet evolving customer needs.
