Britain’s funds industry has suffered from a “hiring paralysis” compared with rival European hubs as tensions rise over the UK crashing out of the European Union without a deal by the end of this year.
Stats from the Investment Association show 40,000 people were directly employed by the £8.5trn (€9.35trn) UK investment industry by the end of 2019, broadly unchanged from the year before. Around 113,000 jobs are supported directly or indirectly by the industry.
This compares with a 5% rise in the number of people working across asset management firms in Luxembourg, Europe’s central cross-border fund hub, the Financial Times reported.
Almost 6,000 people were employed by Luxembourg-based fund groups at the end of last year, the local regulator told the FT. This figure rises to 16,000 after including all fund depositary and transfer agent roles, according to the Association of the Luxembourg Fund Industry.
Drop in hiring
While the UK investment management market remains the largest in Europe in absolute terms, the number of people joining the industry has tapered off following the Brexit vote.
Since 2016 the number of fund employees in London has grown by just 6% while Luxembourg asset managers have reported a 31% spike in jobs.
One London-based headhunter told the FT the dramatic back and forth over Brexit last year had led to “some hiring paralysis” and forced many asset managers to put their plans on pause.
Major UK fund houses from Columbia Threadneedle to Aberdeen Standard Investments and M&G have shifted billions worth of non-sterling client assets ahead of the UK’s exit from the European Union and sought to beef up existing offices on the continent or create new distribution hubs.
Alongside Luxembourg, Dublin has also been one of the most popular destinations for UK fund groups to set up shop. According to trade body Irish Funds, the nation’s total investment workforce has expanded by 12% between 2016 and 2018.
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