UK fund industry becoming less concentrated

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The £5.1trn UK fund management industry is becoming less concentrated in contrast with global trends, TheCityUK’s report into the industry has found.

In its overview of the UK fund management industry, financial services trade association TheCityUK was becoming less concentrated.

Although the top five asset managers accounted for 28 per cent of total funds under management at the end of 2011, a 2 per cent drop from 2010. BlackRock was the largest firm with £556bn in funds under management in the UK, followed by Legal & General and M&G investments.

More than half of total funds under management were managed by foreign firms operating in the UK, while37 per cent of funds under management, around £1.9trn, came from overseas.

TheCityUK estimates funds under management will grow by 5 per cent in 2012 from last year’s £5.1trn. The UK retail space was estimated at having £760bn in funds under management in 2011.

According to TheCityUK, the fund management generated “close to 1 per cent of GDP in 2011” and was an significant component of the financial sector’s overall contribution of 9 per cent in 2011. The industry is estimated to have generated £18.8bn in revenue, although margins as a percentage of revenue remained below 2007 levels at 34 per cent.

The inducty also employed 35,000 people, mostly in London, although 9.9 per cent were located in Scotland.