An unusual combination of downward pressure on prices of both equities and bonds in 2022 resulted in total assets falling significantly, the IA said.

Despite this, the UK investment management industry remained an international success story, the IA insisted.

Alongside the £4.6trn managed by UK investment managers for UK retail and institutional investors, a further £4.2trn (48% of assets managed in the UK) was managed on behalf of overseas investors, the industry body said.

The year 2022 saw a number of notable trends and developments, the IA said.

While institutional clients, such as pension funds, constituted the majority of investment management industry clients, retail customers now hold nearly a quarter (24.7%) of AUM, up from 22% in 2021 and 20% in 2020.

The increase reflects different asset exposure leading to different market outcomes through 2022, the IA said, but also reflects wider retail participation by retail investors whose appetite for investing grew during the Coronavirus pandemic, the IA said.    


Meanwhile, turbulence within the UK gilt market created an acute and highly unusual set of difficulties for UK pension scheme investment and for wider UK financial stability through September to October. As such, LDI (liability driven investment) strategies came under significant pressure in 2022 and were down 28% year-on-year on a matched basis.  


Responsible investment funds also faced a challenging 2022, with growth slowing and funds experiencing a more modest £5.4bn inflow, down from £15.9bn in 2021.

Total investments in the UK reached £1.4trn, across equities, bonds, infrastructure and property investment. However, the decline in investment in UK equities continued at pace with £12bn taken out of UK equity funds in 2022, double the outflow of the previous year.  


Chris Cummings, chief executive of the Investment Association, said: “2022 saw a perfect storm of unprecedented events which impacted UK households and the economy. The investment management industry, like many others, was affected and we saw a significant fall in assets under management, reflecting the challenging economic environment.”  

Within the UK’s investment management industry, 46,200 people are directly employed by investment management firms. Despite the overall fall in assets under management in 2022, direct employment increased 3% year-on year.

The industry also provides indirect employment through supporting industries such as custodian banks, transfer agents and law firms - and this accounts for a further 80,200 jobs.