UK financial services attracts significant overseas investment
New research released today illustrates for the first time the true composition of ownership of the UK’s financial services sector and shows the UK is a popular destination for investment from overseas. According to the report from TheCityUK, UK Trade & Investment and IMAS Corporate Finance, foreign owned firms make up nearly half of the financial services groups worth over £100m in the UK.
The report, produced by IMAS, reveals a financial services sector consisting of 50,000 entities and 3,400 different groups covering a broad range of businesses. In total, over a third (35%) of all businesses are privately held and over a quarter (27%) are owned overseas, although this proportion increases to 33% for businesses valued £25-100m and 45% for those worth over £100m.
Chris Cummings, Chief Executive of TheCityUK, said:
“As a nation we face questions about how to achieve economic growth and where the investment will come from to drive it. This report shows that the UK is tremendously successful in attracting significant levels of overseas investment into our financial services sector. Combined with domestic ownership, this has created an industry that accounts for nearly 9% of the UK’s total economic output. Therefore it’s vitally important, both to our financial services sector and the wider economy, that the UK continues to be open and attractive to inward investment.”
The research shows that the US is the biggest foreign investor, accounting for 45% of the total foreign investment overall; Europe represents 26%, Asia accounts for 16% and BRICS 4%.
Edward Oakden, Managing Director of Sector's Group, UK Trade & Investment, said:
“The fact that a quarter of all financial service firms are overseas owned clearly demonstrates the open character of financial services in the UK. The appeal of the UK as a place for financial services companies to do business can be attributed to our robust legal and regulatory framework, the expertise and skills base across the UK, and our location and language. The UK is well poised to continue to attract investment, not only from the US but also from Europe and high growth economies.”
Investment is the largest sector within the UK’s financial services sector, representing 48% of groups by number, the majority of which are involved in advice. The second largest sector is lending (26%), followed by general insurance (18%) and financial support services (8%).
Olly Laughton-Scott, Managing Partner of IMAS, said:
“The UK is a key hub in the increasingly globalised financial services marketplace and we expect to see continued cross-border M&A activity with international firms looking to enter or expand their presence in the UK market. It is a testament to the UK’s transparency and disclosure requirements in both the public and private capital markets that key statistics, such as ownership and financial size, are available enabling the production of this report.”
Follow this link to access the full report.
