LONDON (Reuters) – Britain’s fund managers reported a 6 percent increase in assets under management to 10 trillion pounds ($10.8 trillion) last year, the Investment Association said on Tuesday, but a slowdown is likely.
The growth rate in 2021 was lower than the compound average of the 11% annual increase seen in the past 10 years, according to an IA survey.
“While 2021 was a positive year, we are now facing a completely different operating environment,” IA CEO Chris Cummings said in the report, referring to the war in Ukraine.
“High interest rates bring the specter of a recession and weaken the outlook for asset growth.”
Sterling fell to record lows against the dollar this week as concerns escalated over the government’s recently announced fiscal plan, unleashing calls for an emergency rate hike from the Bank of England to restore confidence.
Assets under management within funds open to a group of investors totaled £4.1tn last year, with nearly two-thirds of it in funds registered overseas, mainly in Ireland and Luxembourg.
So far, the EU has not physically constrained the mandate, the mechanism that allows overseas asset managers to manage the money in the bloc, but the volume of business, which brings export revenue to Britain, highlights what is at stake if the EU-UK relations It was completely collapsed due to issues such as post-Brexit in Northern Ireland.
Nearly half of the assets in the survey are now subject to environmental, social, and governance standards, and assets that apply exceptions have reached 28%, up from 25% a year earlier.
Cummings described sustainable and responsible investment growth as a “highlight trend”.
(dollar = 0.9260 pounds)