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Andy Bissell

Equity funds lead 15% growth in UK regulated market

New findings from the 7th annual edition of the UK Fund Report, compiled by Monterey Insight, the independent fund research company, reveal the market shares of all service providers in the UK fund industry.

All data is as at 31st December 2023, and covers UK Regulated funds.

 

By the end of 2023, UK regulated fund assets surged to $2,708.1 billion, marking a 14.6% increase from the previous year. However, the total number of funds and sub-funds slightly dipped by 0.2% to 3,691.

 

Equity funds continued to dominate as the largest asset class with $1,176.1 billion, followed by index tracking equities at $552.9 billion, and mixed equities/bonds at $437.5 billion.

 

As a promoter/initiator, Phoenix Group captured the largest proportion of new business introduced over the year, securing $15.9 billion in assets. A detailed breakdown reveals that UK equities lead in terms of assets, while global equities top the list by the number of funds launched during the year.

  

The value of new UK regulated schemes and sub-funds launched as at 31st December 2023, amounted to total assets of $49.2 billion from over 125 sub-funds. From this, total assets of $21.2 billion from 58 sub-funds were generated from the creation of entirely new schemes.

Among the newly launched regulated fund structures in the UK, ACS schemes are at the forefront with total assets amounting to $37.5 billion, closely followed by OEIC schemes with total assets of $10.0 billion. However, looking at newly launched products by number of sub-funds, OEICs lead with the highest number of new funds launched, with over 90 sub-funds followed by ACS schemes with over 19 sub-funds.

 

When it comes to service providers, BlackRock Financial Management remains the top promoter/initiator. St James’s Place ranks second followed by Vanguard Group in third place.

Rank

Promoters/Initiators

Total Net Assets US$bn

1

BlackRock Financial Management

305.5

2

St James’s Place

192.9

3

Vanguard Group

122.9

In the UK ManCo/AIFM rankings, BlackRock Investment Managers retains the top spot, and St James’s Place holds onto second place. Waystone Management makes a notable entry into third position following the acquisition of Link Fund Solutions. These rankings also mirror the Authorised Corporate Director/Manager rankings listed in the table below: 

Rank

ManCo/AIFMs

Total Net Assets US$bn

1

BlackRock Investment Managers

305.5

2

St James’s Place

192.9

3

Waystone Management

123.4

Rank

ACD & AFM

Total Net Assets US$bn

1

BlackRock Investment Managers

300.4

2

St James’s Place

192.9

3

Waystone Management

123.4

 Among Third Party ManCo/AIFMs, Waystone Management leads, with both the largest assets and the highest number of sub-funds total of 229. Thesis Unit Trust Management takes second place, with Apex FundRock coming in third.

 

Rank

Third Party ManCo/AIFMs

Total Net Assets US$bn

1

Waystone Management

122.7

2

Thesis Unit Trust Management

30.8

3

Apex Fundrock

26.0

Karl Midl, Country Head UK, Waystone, said: “This is an important milestone for Waystone and our UK business. Not only is this a reflection of our product strength, but also the quality of our highly specialised team, whose technical insight and in-depth knowledge has been instrumental in delivering exceptional service. We look forward to continuing to support investment managers across the UK, helping them navigate the rapidly changing investment landscape and deliver on their investment strategies.” 


For fund administration services (fund accounting) across UK regulated fundsState Street holds the top spot by assets. Northern Trust follows in second place, while HSBC remains in third position:

Rank

Administrators/Fund Accounting

Total Net Assets US$bn

1

State Street

595.7

2

Northern Trust

560.5

3

HSBC

417.2

In the latest custodian rankings, Northern Trust has surged two places to claim the top spot with the largest assets under custody. State Street has moved down to second place, while BNY Mellon holds third.

 

Rank

Custodians

Total Net Assets US$bn

1

Northern Trust

594.7

2

State Street

573.7

3

BNY Mellon

511.0

Laurence Everitt, Head of Global Fund Services, UK at Northern Trust, commented: “We are proud to be confirmed as the leading provider of custody, depositary services and fund accounting by number of funds, in this year’s report. Meeting our clients’ requirements for safekeeping, process efficiency, transparency and insight through global custody remains fundamental for our asset servicing business. Its importance in supporting our clients’ resiliency, risk and business management also continues to be heightened by today’s complex and volatile investment environment.

“Additionally, 2024 marks the tenth anniversary of Northern Trust opening its depositary business in the UK. This business has continually evolved and grown rapidly to today support more than 30 investment managers and close to £600 billion of assets. Both services are aligned with our highly ranked fund administration and transfer agency solutions, and we thank our clients for their continued trust and collaborative partnerships with us across all these areas.” In the market share rankings by assets for depositaries/trustees of UK regulated funds, Northern Trust Services has ascended to the leading position from second place last year. NatWest Trustee & Depositary now holds the second place, while BNY Mellon has moved up to third:

Rank

Depositaries/Trustees

Total Net Assets US$bn

1

Northern Trust

555.4

2

NatWest Trustee & Depositary Services

488.2

3

BNY Mellon

397.7

In the transfer agents ranking, SS&C Financial Services International holds onto the top spot. Northern Trust remains in second place, while BNY Mellon secures third: 

Rank

Transfer Agents/ Registrars

Total Net Assets US$bn

1

SS&C Financial Services International

845.0

2

Northern Trust

498.5

3

BNY Mellon

306.6

Among the UK’s professional audit firms, PwC remains at the top, leading in both the number of funds and total assets, which amount to $896.7 billionEY follows in second place with $790.9 billion, and KPMG holds third with $451.2 billion.

Rank

Auditors

No. Funds

1

PwC

901

2

EY

787

3

KPMG

634

Karine Pacary, Managing Director at Monterey Insight commented: “We are pleased to share the latest results of the UK fund industry in our 7th edition of the Monterey Insight UK Fund Report 2024. By the end of 2023, Equity funds have driven a remarkable 15% growth in the UK regulated market, lifting total assets to $2,708.1 billion by the end of 2023.

This represents a significant rebound from the previous year’s negative performance. Equity funds remain the largest asset class showcasing their dominance.

The most substantial organic growth is coming from equities, which account for 38.8% of the total growth, and index tracking equities, which contribute 29.1%. In terms of product types, OEICs lead the growth with 36.9%, followed by authorised unit trusts at 29.2%, and authorised contractual schemes at 26.5%. These categories are the primary drivers of growth, reflecting strong investor confidence and interest in these investment vehicles.”

 

Notification for reference to the reader:

26/11/2024 - It has come to our attention that a significant sub-fund of the PUTM Authorised Contractual Scheme was omitted from the UK Fund Report 2024. Given the material nature of this change, we have decided to re-issue the data and change this release to include the update.

The figures include the following types of collective investment schemes that are regulated by the Financial Conduct Authority (FCA) as at 31st December 2023: authorised contractual schemes, authorised unit trusts and open-ended investment companies. Common investment funds, common deposit funds and investment trusts are also included in this report.

 

For more information, please contact:

Karine Pacary

Managing Director

Monterey Insight

Tel: +44 (0)20 4526 2940


Notes to Editors:

Monterey Insight is an independent fund research company that provides comprehensive statistical analysis of the Guernsey Ireland, Jersey, Luxembourg, and UK fund industries: the only complete reference of service providers for all funds serviced in these jurisdictions.

 

Source: Monterey Insight UK Fund Report 2024

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