Operators manage to boost revenue as the economy recovers.
London, United Kingdom (PRWEB) May 10, 2013
The Fund Management Activities industry in the United Kingdom is the second largest in the world and the largest in Europe. Funds under management (FUM) by the industry are expected to reach £4.7 trillion in 2013-14. Industry revenue comes predominantly from management fees, which are normally calculated as a percentage of FUM.
The industry is expected to grow at a compound annual rate of 2.2% over the five years through 2013-14 to reach £13.3 billion. According to IBISWorld industry analyst Iyman Uvais, “although this suggests that the industry performed reasonably well at a time when financial markets witnessed considerable volatility and funds from institutional and retail investors were significantly constrained, the industry's growth is primarily attributable to the significant decline in industry revenue recorded in 2008-09, which is the base year of the five-year period." As a result, industry revenue is below the levels recorded prior to the financial crisis, in real terms. Industry FUM also followed a similar trend and is expected to be lower when compared with the value of FUM recorded in 2006-07, in real terms.
In 2013-14, revenue is expected to increase 3.3%, and is expected to be driven by a marginal upturn in financial markets. The gradual recovery of the global economy, coupled with significant quantitative easing activity and other stimulus measures will improve investor sentiment. Meanwhile, institutional funds are also expected to flow in to the industry. However, despite favourable conditions, considerable uncertainties continue to exist, which can hamper industry performance considerably.
Industry growth will be held back early in next few years due to financial market volatility. This will be attributable to problems in the eurozone, slowing growth in key emerging markets, and slow recovery in the United Kingdom. The possible introduction of a financial transaction tax can also hinder performance. Uvais adds, “In the long term, the industry should return to stronger growth, driven by more buoyant equity markets, rising ageing population, increasing funds from emerging economies and rising retail demand for investment products." Overall, during the five years through 2017-18, IBISWorld forecasts that both industry revenue and FUM will continue to increase at a modest rate.
The top four UK firms operating in the Fund Management Activities industry is expected to manage a combined total of 28% of FUM in 2013-14. This indicates that the industry has a low level of market share concentration. Major fund managers include BlackRock and Legal & General.
For more information on the Fund Management Activities industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry includes portfolio and fund management activities provided on a fee or contract basis for individuals, businesses and others. It covers firms operating and managing assets in the United Kingdom for both domestic and overseas clients.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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