According to analysis by LSEG Lipper, BlackRock has increased its share of total net assets in the UK from 8.3% to 15.6% between 2013 and 2023, reflecting a wider trend of concentration across industries.
Over the past ten years, total net assets in the UK asset management industry have doubled, from £1.02trn to £2.04trn, while BlackRock has seen its UK total net assets increase from £84bn to £318bn, calculated based on UK registered for sale mutual fund and ETF total net assets, with currency of record GBP.
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LSEG Lipper head of research for UK and Ireland Dewi John described the consolidation as a “significant shift”, but added, increasing consolidation is “not something peculiar to asset management”, nor is it necessarily a “bad thing for customers”.
“Some research has linked the increased proportion of stocks held by the largest institutional investors to greater market volatility – albeit with the caveat that these assertions ‘remain unclear and unexplored’,” he said. “What is easier to gauge is the degree of price competitiveness, performance and innovation. Regarding the latter, there has been much over the past decade, not least in the ETF and indexing space.
“What is more, the trend in charges is still downward – itself a factor driving consolidation.”
Assets have also become more concentrated in the three largest players, with BlackRock joined by Vanguard (£140bn TNA) and Aviva (£109bn TNA), representing 28% of the total UK industry, compared with 23.1% in 2013.
Taking the top ten largest houses as a collective and the trend reverses, with a decrease in their total share, down from 53.1% to 52.6% over the decade, LSEG Lipper data found.
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Looking to the future, LSEG Lipper’s John predicts greater consolidation, as a slower rate of growth than the past decade “inevitably leads to greater pressures to achieve scale through consolidation rather than organically”.
He added: “Statistical measures of concentration, such as the Herfindahl-Hirschman Index, show that asset management is a long way off being heavily concentrated.
“While there are always problems to be addressed, these do not seem to be driven significantly by consolidation.”
