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Monday 26 July 2010 OPPORTUNITY FOR THE GOVERNMENT TO IMPROVE THE UK COMPETITIVE LANDSCAPE - IMA ANNUAL SURVEY REVEALS UK asset managers representing over £2 trillion of investments are raising serious questions about the UK as a focus of future expansion, reveals the Investment Management Association's eighth Annual Asset Management survey published today. The survey includes a series of in-depth interviews with 24 CEOs, CIOs and Chairmen from a cross-section of firms. Twenty-two of them - managing over £2 trillion in the UK** - indicate that a lack of certainty around taxation and immigration policy could force some firms to relocate existing facilities to rival international financial centres and focus future expansion plans outside the UK. However, all asset managers interviewed saw the potential for the new Coalition Government to allay current concerns and create certainty about the future of the UK, to ensure its competitiveness as a place to do business. Despite these concerns, respondents to the IMA's survey also identified a number of attractions for the UK as a business location, ranging from ‘natural advantages' of time-zone and language to its proven ability to attract talent internationally and the current relatively benign regulatory regime. The importance of being part of a wider financial cluster - especially the proximity to the sell-side - was also viewed as an important factor for many firms. In the longer term, there are significant opportunities for the industry, both domestically and internationally, including asset management led solutions for retirement provision. At a time of substantial economic and demographic change, the UK has the potential to remain a world-leading asset management centre. Richard Saunders, Chief Executive of the IMA comments: "Asset managers still rate the UK's investment infrastructure and reputation as a premier league financial services centre. They are not about to up sticks, but there is certainly more restiveness about the UK this year than last, with particular unease around the impact of tax and immigration policy. In our view, this presents the Coalition Government with a strong opportunity to provide certainty to an industry managing assets equivalent to 240% of UK GDP." *** The eighth annual IMA Asset Management Survey indicates a resilient £3.4 trillion asset management industry reporting a record year for funds, with the largest retail inflows in the industry's history. The sector attracted a record £26 billion in new retail investments in 2009, and remains the largest asset management centre in the EU, with 30% of total assets under management. Concerns about the shape of future regulation Asset managers acknowledge there are lessons to be learnt from the financial crisis, both for firms within the industry and for the wider financial services sector. They are keen to see a regulatory response that is proportionate, focused and co-ordinated internationally. The majority of firms interviewed said the Alternative Investment Fund Managers Directive is a questionable piece of legislation motivated by pre-existing hostility to certain parts of the wider asset management industry. Those interviewed agreed the Directive risks having a disproportionate and damaging impact across the asset management industry and for its clients: pension funds and consumers. Looking across to the future architecture of the banking system, as investors in financial services and as market participants, the majority of asset managers interviewed indicated that some form of separation between retail and investment banks (agency and principal activities) is needed, but only a small proportion are in favour of full ‘Glass-Steagall' separation. Richard Saunders comments: "The asset management industry is clear there should be no return to the status quo as it existed before the crisis, but equally clear that regulation must target the root causes of the crisis and not demonise the financial services sector as a whole. There is general consensus that UCITS has been a good thing for the industry and allowed funds to market themselves across Europe, from which the UK industry has been a major beneficiary. But it is dispiriting that the response to a banking crisis has been a fund management directive. At the most basic level, it is crucial that policymakers draw careful distinction between asset managers, who act firmly in the interests of their retail and institutional clients, and the own-account trading activities of investment banks." A growing role for the asset management industry Shedding their former identity as the investment arms of distributors, an increasing number of investment managers are independent agency businesses with a global client base. For the first time, the Survey finds that less than 50% of assets under management in the UK are managed by firms owned by investment banks, retail banks or insurance companies. Richard Saunders concludes: "Our survey paints a picture of an assertive, innovative and independent industry, now overtly global in its outlook and ambitions. Its distinctive business model, with its clear agency relationship with clients, has stood it in good stead during the crisis. And the future - whilst not without its challenges - looks positive as the industry's role and reputation continues to grow." To find out more, click to watch a video interview with IMA Chief Executive, Richard Saunders discussing the survey's findings and emerging issues. The IMA's website www.investmentuk.org includes 'A summary of the IMA Annual Survey' as well as the full survey, 'Asset Management in the UK 2009-2010'. - ENDS - Notes to Editors * The IMA's eighth annual asset management survey entitled ‘Asset Management in the UK 2009-2010', the most comprehensive account of the UK investment management industry, is published today, 26 July 2010. The results are based on the questionnaire responses of 75 IMA member firms, who between them manage £3 trillion in the UK, along with in-depth, face to face interviews with CEOs and senior managers of 24 IMA member firms, managing £2.2 trillion in the UK. All references to ‘Assets Under Management in the UK' refer to figures as at December 2009. ** The 24 firms interviewed were AEGON Asset Management, Aviva Investors, AXA Investment Managers, Barclays Wealth, BlackRock Investment Management, Capital International, F & C Asset Management, Fidelity International, Henderson Global Investors, Insight Investment Management, Invesco Perpetual, Investec Asset Management, Invista Real Estate Investment Management, JP Morgan Asset Management, Jupiter Asset Management, Lazard Asset Management, Legal & General Investment Management, M&G Investments, Newton Investment Management, Odey Asset Management, Schroder Investment Management, Standard Life Investments, State Street Global Advisors, and Threadneedle Asset Management. *** UK GDP is £1.4 trillion whilst assets under management by the UK investment management industry total £3.4 trillion. About the Investment Management Association |
