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UK asset management ‘resilient’ despite Brexit and economic slowdown fears

By Henry Saker-Clark, PA City Reporter

The total amount of investment assets under management in the UK was “resilient” last year despite concerns over Brexit and the global economy, according to new research.

The total assets under management in the UK remained steady at £7.7 trillion in 2018, according to the Investment Association’s latest investment management survey.

However, the latest figures highlighted a slowdown in the amount of investment in UK funds as investments failed to match the growth of the UK economy for the first time since 2015.

Brexit-related uncertainty also appeared to have an impact on returns as UK equity returns slid 9.5% over the year.

However, UK gilts and corporates both delivered growth for the period, with returns increasing by 0.5% and 2.2% respectively.

It reflected a move away from equity investments, with more cash being invested into other areas such as infrastructure and direct lending.

The industry showed signs of positivity despite fears over the state of the global economy, as jobs at investment management firms in the UK rose 4% to 39,500 over the year.

Chris Cummings, chief executive of the Investment Association, said: “Against economic and political headwinds, the UK investment management industry has been resilient and remains a domestic and international success story.

“Investment managers invest £1.6 trillion in the UK economy, funding businesses, infrastructure projects and creating jobs across the country.

“Our ability to seize global opportunities has seen the industry enjoy a decade of robust growth, with an increasing number of savers from around the world choosing to use the services of a UK investment manager.”

The Investment Association’s survey also revealed a large decline in net retail sales, which slid 85% for the year, after they fell heavily behind a post-Brexit referendum rebound in 2017.

Jonathan Lipkin, director of public policy at the Investment Association, added: “In our feedback from 2018, on a no-deal Brexit, it was clear that preparations were taking place across investment management firms to ensure operational capacity, however the UK left the EU.”