Fund assets in UK decline by 12pc in 2008
THE LEVEL of assets being managed in the UK fell by 12 per cent last year to £3.7 trillion as the financial crisis took its toll.
The annual fund management report from International Financial Services London (IFSL) said asset levels declined due to rocky stock markets and a surge in the number of clients withdrawing their cash.
The decline follows five successive years of growth of fund assets in the UK, averaging around eight per cent a year, IFSL said.
Tumbling assets under management led to a decline in profit margins among UK fund managers from 32 per cent to 23 per cent, the study said.
“Profitability is likely to remain at lower levels in 2009 as market conditions including reduced asset values, increased competition for new business and investor shift to lower revenue asset classes persist,” said senior IFSL economist Marko Maslakovic.
He said early indications show a recovery has started this year, with UK funds for private investors booking a 14 per cent rise in assets so far in 2009.
But he said London still offers one of the world’s leading fund management centres, despite the damage caused by the financial crisis.
“The UK is the second-largest fund-management market after the US and by far the biggest centre in Europe,” Maslakovic added.
“London continues to be the leading centre for international fund management with over a third of its funds under management originating from overseas.”
Global assets in funds fell by 19 per cent last year to $61.6 trillion (£38.6 trillion), IFSLadded.
Meanwhile, IFSL said that London’s hedge fund managers lost ground to New York last year. London’s share of global hedge fund assets fell by two per cent to 18 per cent, while the USshare rose two per cent to 43 per cent.