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Money Management

Assets managed by U.K. firms up 20% in 2016 – report

Assets managed in the U.K. grew 20% to a record 6.9 trillion ($8.5 trillion) in 2016, the Investment Association's latest survey found.

In its first survey since the decision by the U.K. to leave the European Union, the IA found assets under management in the U.K. have grown an average 8% per year in the past 10 years.

Assets run on behalf of overseas investors grew 18.2% to 2.6 trillion, benefiting in particular from the weakening of the pound against all other major currencies after the Brexit vote. More than 50% of these assets are run for European clients at 1.4 trillion, up 16.7% during the 12 months. U.S. client assets run in the U.K. totaled 450 billion, up 45.2% from Dec. 31, 2015. The remaining 750 billion was run for clients located elsewhere in the world, up 13.6%.

As of Dec. 31, the management of about 900 billion was delegated to the U.K. on behalf of strategies based in Dublin and Luxembourg. "Retaining this delegation arrangement will be key to maintaining the U.K.'s position in a post-Brexit world," said the survey report.

Institutional investors represent 79% of total assets under management in the U.K., with managers running about 3.6 trillion on their behalf. That proportion is down slightly from the 80% figure as of Dec. 31, 2015, when managers ran 3.3 trillion for institutional clients.

Retirement plans accounted for about 2.2 trillion of institutional assets, up 15.8% vs. 2015 assets. Retirement assets represented 61% of total institutional assets, up from 57.6% of assets a year previous. Insurance assets represented 27% of institutional assets, down from 29% in 2015.

"The asset management industry has again experienced a year of strong growth confirming the U.K.'s place at the forefront of a competitive global market," said Chris Cummings, association CEO, in a statement accompanying the report. "As an industry, we are responsible for looking after the pensions and investments for millions of savers. We act as the stewards of the UK economy and we work hard to ensure good corporate governance. We recognize the responsibility we carry and the trust invested in us by the investing public."

The full survey is available on the IA website.