The 25 largest U.K. money managers had combined assets under management of £2.2 trillion ($3.4 trillion) as of June 30, with insurer- and bank-owned firms dominating the top 10, according to Pensions & Investments' inaugural survey of U.K. money managers.
The world's largest money manager — BlackRock Inc. — also topped the list for the U.K. with £404 billion in AUM from U.K. clients.
Legal & General Investment Management placed second with £275 billion and BNY Mellon Asset Management was in third with £220 billion.
Schroders PLC was the highest-ranked U.K.-based independent manager, coming in 10th with £73 billion in P&I's survey, which ranked managers according to AUM sourced from institutional and retail U.K. clients.
Of the top 10, half were money management subsidiaries of insurance companies. Besides LGIM, Aviva Investors, Scottish Widows Investment Partnership, Standard Life Investments and M&G Investments placed fourth, fifth, sixth and eighth, respectively. Aviva had £140 billion in U.K. AUM as of June 30; Scottish Widows, £127 billion; Standard Life, £115 billion; and M&G, £83 billion.
“By the nature of their underlying insurance clients, these asset managers have had to be good risk managers for a long time,” said Pete Drewienkiewicz, director and head of manager research at Redington Ltd., a London-based independent investment consultancy. “That keen approach to risk management has proven valuable as the direction of travel for U.K. pension funds is to substantially derisk.”
Three major trends have influenced U.K. asset inflows, and all managers in the top 10 have benefited from one or more of those market drivers, according to investment bankers, analysts and consultants. First, the move by all investors to passive management and away from active strategies clearly helped put firms such as BlackRock and LGIM at the top. The second raison d'etre is the shift into fixed income from equities. The third factor influencing asset flows is further diversification into alternative asset classes and more global strategies, sources said.
“BlackRock benefited from all three” market trends, said one consultant who asked not to be identified.