UK – The top five investment managers of segregated pension funds in the UK saw the value of their business fall last year, according to a Financial Times survey of pension fund managers, which blames the decline on the downturn in the financial markets and the shift among pension funds towards specialist managers.
Though Merrill Lynch Investment Managers (MLIM) still tops the survey, the value of its segregated pension business dropped 24.7% from £63.7bn (€99bn) in 2000 to £48bn (€74.6bn) in 2001.
Second-placed Schroders Investment Management fared even worse, seeing its segregated pension fund business fall back 27.7% from £53.8bn to £38.9bn between 2000 and 2001. Deutsche Asset Management (DeAM) and Barclays Global Investors, respective third and fourth, reported declines of 7.9% and 7.2%.
Andrew Dyson, head of institutional marketing at MLIM, says the figures are not cause for concern. “Taken globally, the decline in our UK pension fund business is minimal. Our total assets under management is growing and in good shape,” he comments.
A spokesman for Schroders says the decline is a result of the economic downturn and the loss of clients in early 2001, though the situation was now stable.
UBS Global Asset Management was in fifth place, the value of its segregated pension business dropping 12.2% from £26.9bn in 2000 to £23.6bn last year.
Other investment managers, in particular index-trackers and specialist firms, have gained market share. Boston-based State Street Global Advisors recorded a 145.7% increase in its pension fund business from 2000’s £4.4bn to £10.8bn last year, whilst other notable increases included Legal & General (99.2%), Capital International (24.2%) and Morley Fund Management (23.4%).
Despite the declines at the top end of the survey, a report just published by UBS suggests pension fund assets will grow faster than the economy in the UK. Providing DB schemes record real growth 2% per year, alongside 8% for DC and personal pensions, UBS predicts pension fund assets will rise more than 50% from their 2001 level of £1,000bn to over £1,500bn by 2011.