UK fund managers post 6% rise in assets under management

LONDON Reuters fund managers posted a 6% rise in assets under management to 10 trillion pounds $10.8 trillion last year, but a slowdown is likely, the Investment Association IA said on Tuesday.

The growth rate for 2021 was less than the 11% compound average annual increase seen in the last 10 years, according to an IA survey.

Chris Cummings, IA CEO Chris Cummings, said in the report that 2021 was a positive year, but now we face a very different operating environment.

The rising interest rates cause a spectre of a recession and weaken the outlook for asset growth. The UK fell to record lows against the dollar this week as fears over the government's fiscal plan resulted in calls for an emergency Bank of England rate hike to restore confidence.

Last year, assets managed within funds opened to a range of investors reached 4.1 trillion pounds, with almost two-thirds sitting in funds registered overseas, mainly in Ireland and Luxembourg.

The EU hasn't restricted delegation, the mechanism that allows overseas asset managers to run funds based in the bloc, but the volume of business, which brings in export earnings to Britain, highlights what's at stake if EU-UK relations break down completely over issues like post-Brexit Northern Ireland.

Nearly half of assets in the survey are now subject to environmental, social and governance criteria, and assets applying exclusions reached 28%, compared to 25% a year ago.

Cummings described the growth of sustainable and responsible investing as a standout trend.