Asset management powers foreign investment into the UK

Investment management firms (including asset managers, asset owners, investment consultants, private equity and venture capital) were the largest source of financial services foreign direct investment (FDI) projects in the UK in 2022.

The UK is one of the largest and most diverse investment management centres in the world

Investment management firms accounted for around one third of the 124 FS FDI projects and £1.2bn investment respectively. New analysis by the City of London Corporation shows that just over half of the projects were new firm entries, while the rest were expansions of foreign investment management firms in the UK. The findings reveal the vibrancy of the sector and the UK’s appeal as a global investment management hub.

The UK is one of the largest and most diverse investment management centres in the world. It is a hotspot for global managers to operate in. Over half of the UK’s assets are managed by firms with overseas headquarters. And it serves clients all over the world: according to the Investment Association, 46% of UK assets are managed on behalf of overseas clients. 

The UK houses a truly global mix of players, including more than 1,100 asset management firms from 37 countries. The US was the largest source country in 2022, accounting for a quarter of projects. The rest of the investing firms were from a diverse geography, ranging from Europe to Australia, Bahrain, Brazil, Canada, China, Japan, Saudi Arabia and Singapore.

The UK and Europe remain close partners in investment management. 45% of the projects were from Europe. France and Switzerland were the major European investing countries.

Of the 25 new UK offices set up by investment management firms in 2022, over half serve as regional hubs

The UK attracts global investment management firms who are looking for a hub to manage their international business. Of the 25 new UK offices set up by investment management firms in 2022, over half serve as regional hubs. Some of them do not only cover Europe, but also the Middle East and Africa.

London is the destination of choice for global pension funds and sovereign wealth funds. It houses the largest number of overseas offices of these funds globally. The Public Investment Fund from Saudi Arabia is the latest entry in 2022. Investment management firms benefit from access to international talent, exposure to global investment opportunities and a mature and supportive financial ecosystem in the UK.

The UK attracts clusters of specialist investment managers. In 2022, real estate specialists stood out, with seven managers setting up their inaugural UK offices. The UK also attracted investment management firms specialising in tech, biomedical tech, infrastructure, venture debt and natural gas. It has competitive capabilities and deal opportunities in a wide range of asset classes and sectors.

Read The UK: a top destination for financial and professional services investment to learn more about the state of foreign investment in financial and professional services in the UK.

Figures on foreign direct investment in this article were produced by The City of London Corporation using data provided by FDI Markets, a service from The Financial Times Limited, accessed in February 2023.