The IA has issued a public warning, urging politicians to conclude a Brexit deal by March. These comments come as new figures from the IA show that UK asset management industry grew to a record £7.7tn over the past year – an 11 per cent increase from 2016.
The industry has seen a significant rise in assets under management from overseas clients. These rose by a fifth to £3.1tn – over half of which comes from the European investors.
In Europe the UK remains the largest centre of asset management, larger than the markets in Germany, France and Switzerland combined.
The IA says that the importance of the UK’s financial services sector to the UK and European economy has come into “sharp focus” as the date for the UK exiting the EU rapidly approaches.
IA chief executive Chris Cummings says: “The IA’s latest data reveals that assets managed in the UK for European clients increased by nearly 30 per cent in 2017 to £1.8tn, making Europe the largest source of overseas assets for UK asset managers.
“The clear value the European market brings to the UK asset management industry underlines the urgent need for a Brexit deal to be completed by March 2019 which protects our industry, and more importantly, the savings of millions of people right across Europe.”
The IA adds that asset management is an indispensable part of the UK economy, providing vital funding for UK businesses and infrastructure.
It estimates that £1.7tn was invested in the UK economy, supporting around 100,000 jobs around the country. This includes asset managers’ UK equity holdings, approximately £920bn in 2017, and worth a third of the FTSE.
UK asset managers are also increasingly funding businesses through private markets with £31bn invested in direct lending in 2017.