The Association of Investment Companies (AIC) has today released a comprehensive report on the ownership of investment companies.
The report shows that institutions own 50% of investment company shares by value, or £89 billion of the holdings that were analysed. Wealth managers hold 25% (£44 billion), private investors 23% (£41 billion) and adviser platforms 2% (£4 billion).
Institutions are particularly significant shareholders of alternative asset investment companies, with a share of 70%. Private investors have a larger stake in investment companies that invest in equities, making up one-third (33%) of the shareholder base of these companies. Wealth managers make up more of the shareholder base of equity investment companies (28%) than they do of alternative investment companies (20%).
The AIC’s analysis is based on shareholder data from Argus Vickers and covers £177 billion of shareholdings, representing 87% of the industry’s total market capitalisation excluding VCTs at the end of December 2023.
Source: AIC/Argus Vickers
Changes since 2022
A year-on-year comparison reveals that institutions marginally increased their share of investment companies’ shareholder base, from 49% at the end of December 2022 to 50% a year later. Wealth managers’ share declined by 1 percentage point, from 26% to 25%.
The shift from wealth managers to institutions is largely accounted for by movements in the shareholder base of alternative investment companies. During 2023, wealth managers’ share of these companies declined from 23% to 20%, while institutions’ share saw a corresponding increase, from 67% to 70%.
AIC comment
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “This report is the most comprehensive analysis ever of investment company ownership. It reveals that our shareholder base is as diverse as investment companies themselves, from the largest institutions and wealth managers all the way through to financial advisers and private investors holding shares on platforms.
“This has always been the case, from the days when investment companies were invented in 1868 to provide the investor of moderate means with the same advantages as large, sophisticated investors. Investment companies are a UK success story, giving investors access to a wide range of global opportunities and channelling capital into the drivers of future economic growth, such as infrastructure and the transition to net zero.
“We will update this analysis regularly to follow trends in the industry’s shareholder base and draw out more insights from the data.”
Largest investors
The report lists the 20 largest institutional investors in investment companies, the 20 largest wealth managers, and the most significant retail and adviser platforms.
Among the top 20 institutional investors are asset managers such as BlackRock, Columbia Threadneedle, Vanguard, Schroders and Fidelity, as well as specialist investors such as City of London Investment Management, Allspring Global Investments and 1607 Capital Partners which are known for investing in investment companies on wider discounts.
The top wealth managers include Rathbones and Investec, which merged last year, as well as Evelyn Partners, Brewin Dolphin and Quilter Cheviot.
The top three private investor platforms are Hargreaves Lansdown, interactive investor and AJ Bell, which between them account for 15% of the shareholder base of investment companies. The most significant adviser platforms are Transact, Embark and Raymond James.
A full list of the largest investors in investment companies, and their shareholdings, is available in the report.
