The asset management landscape: global insights and UK strengths

Our new research on the asset management sector outlines the profound shifts in global markets, regulatory landscapes, and investor expectations. Triggered by extraordinary events such as a global pandemic and geopolitical upheavals, as well as an attendant reappraisal of risk and resilience in financial markets, plus an acceleration of technological innovation, these forces have not only tested the adaptability of asset managers, but have also underscored the sector’s critical role in supporting economic stability and growth.

This report provides a data-driven assessment of that role, providing a detailed account of the sector’s performance, structure and evolving client base in the UK and globally. The findings reveal a sector that has weathered significant challenges and emerged stronger, more resilient, and more globally connected.

The UK’s position as Europe’s largest centre for fund management reflects the international competitiveness of the UK-based sector, helped by its openness to international business, deep talent pool and commitment to innovation. This enables it to make a substantial contribution to the domestic economy.

As the sector continues to evolve, shaped by technological advances and shifting client expectations, this report provides a timely and authoritative resource for all those invested in its future.

UK-based asset management

Sector profile

Assets under management (AUM) by the UK-based fund management industry rebounded in 2024, rising by 10% year on year. There had been something of a recovery in AUM in 2023 after the 12% contraction registered in 2022, but 2024’s increase closed that gap.
In terms of client composition, institutional clients accounted for almost three quarters of total AUM, although retail AUM have increased steadily over the past decade. Private client AUM represented around 1% of the total.
In 2024, for the first time, overseas clients’ AUM represented over half of all assets managed by member firms of The Investment Association. Overseas clients’ AUM reached approximately £5.1trn.
The UK commands over one third of total European AUM, holding the largest market share by a wide margin. France followed in second place with 16.1% of the market.
Alternative funds such as hedge funds and private equity funds represented 17% of total AUM. UK-based hedge fund AUM and private equity investment both ranked second globally (after the US).

Economic contribution

The UK-based asset management industry is estimated to account for around 5.8% of financial and related professional services gross value added (GVA). However, this excludes wider multiplier effects which capture the indirect impact and productivity spillovers, which means that the figure likely understates the sector’s overall contribution to the UK economy.
Fund management firms in the UK provided employment for 74,000 people in 2023. Sector employment is concentrated in London and Edinburgh.
Net exports (trade balance) of fund management services increased by an annual average of 12.3% a year from 2013 to 2023. Gross export growth of fund management services was almost as fast, with an average annual growth rate of 11.0%.

Global asset management

Assets of the global asset management industry reached $298.6trn in 2023, according to TheCityUK estimates. Figures are indicative, as data and definitions vary across sources and may involve double counting.
Conventional funds—by far the largest segment—were concentrated in North America, particularly the US. The US accounted for nearly two-thirds of global pension assets, almost half of mutual fund assets, and around one-third of insurance fund assets.
Global pension assets rose 11% from 2022. The US continued to dominate with a market share of more than 60%, followed by Japan and the UK; pension assets relative to GDP were highest in the Netherlands, Switzerland, and Canada.
Compared to a decade ago, pension fund asset allocation has diversified away from equities. Bond allocations remained stable at around one-third of the total, while alternatives and other assets increased.
Insurance sector assets rose by 2.8% year on year in 2023. Insurers’ portfolios remain dominated by fixed income (over 50% of general account assets), but allocations to alternatives such as private credit, private equity, securitisations, and infrastructure are increasing.
Global mutual fund assets rose by 14.6% year on year in 2023, rebounding from a 15.5% decline in 2022. Equity funds remained the largest category, followed by bond funds, balanced/mixed funds, and money market funds.

Compared to a decade ago, hedge fund AUM rose by 168%, while funds of funds (fofs) declined by 21%. Balanced, fixed income, and multi-strategy funds together accounted for nearly half of hedge fund AUM in 2023, while macro, equity long-short, and distressed securities strategies declined sharply since 2013.
Private equity AUM reached $8.2trn in 2023. ‘Closes’ slowed and fundraising activities weakened, reflecting slower industry cash flows and extended fundraising cycles.
Sovereign Wealth Funds (SWFs) totalled $12.7trn in 2023, rising at an average annual rate of 7.5% since 2014. Asia and the Middle East accounted for over three-quarters of total assets, with China, the UAE, and Norway the largest contributors.
Global ETF AUM grew 26.1% in 2023. The US share was 70.1% of the total, followed by Europe and Asia-Pacific. This illustrates that ETF assets remain concentrated in developed markets, particularly the US.
Global High Net Worth Individual (HNWI) wealth grew 4.6% in 2023 and continued to be concentrated in North America, Asia-Pacific and Europe.
Charitable trusts, foundations, and endowments totalled $7.8trn in 2023 in the US. 2023 also saw an increased share of private foundations within this category.

The asset management landscape: global insights and UK strengths

UK-based asset management

Sector profile

Economic contribution

Global asset management

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