Ownership of investment companies shifts towards institutions and private investors

^{Source: AIC/Argus Vickers}

Institutions’ share of investment companies has grown two percentage points since the end of 2022, from 46% to 48%. Their share of alternative asset investment companies has grown particularly quickly, from 65% in 2022 to 72% according to the latest figures.

Meanwhile, wealth managers hold 24% of the investment company sector, down from 27% in 2022. They hold 17% of alternative investment companies, a sharp decline from the 24% they held two years ago.

Private investors hold 26% of investment company shares, versus 25% in 2022. Their stake in equity investment companies (those that invest in mainstream stocks and shares) has risen from 35% to 37% over that time.

The share of the sector held by adviser platforms has fallen slightly to just over 2%.

^{Source: AIC/Argus Vickers}

The AIC’s report, ‘The ownership of investment companies’, is based on analysis of the Argus Vickers shareholder database. Investors have been classified based on the decision maker rather than the beneficial shareholder, and exposure through derivatives is not shown. A full methodology is included in the report. 

Richard Stone, Chief Executive of the Association of Investment Companies, said: “Investment companies continue to attract a broad range of investors, but their shareholder base is changing. Wealth managers have been under pressure to sell investment companies due to the frustrating cost disclosure rules, which have made portfolios containing investment companies look artificially expensive. This has had a particularly acute impact on the alternatives sectors. Meanwhile, we’ve seen an increase in interest from investors attracted by deep discounts, including overseas investors, which has boosted the share held by institutions.

“Self-directed private investors are big holders of mainstream equity investment companies and continue to favour those that offer consistent and reliable income, holding 55% of the UK Equity Income sector for example. Their share of equity investment companies has increased over the past two years and is now running at 37%.”

Analysis by country

UK investors hold 74% of investment companies’ shares, with US investors accounting for 13%. However, the shareholder base of alternative asset investment companies is more geographically diverse.

Non-UK investors hold 40% of alternative asset investment companies, with US investors holding 25%, Swiss investors 3%, and a number of other countries accounting for 1% each including the Netherlands, Norway and Germany.

This is very different from equity investment companies, where UK investors account for 84% of shareholdings. 

^{Source: AIC/Argus Vickers}

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “This data highlights the attractions of UK investment companies to investors across the world. Institutional investors from overseas have clearly seen the value in investment companies offering access to alternative assets, made all the more attractive by their discounts. These companies are giving access to illiquid alternatives in a way which simply does not exist in many markets. This strong overseas interest should be a wake-up call to domestic investors who have passed over these opportunities.”

More key findings from the report:

• Wealth managers are still significant holders of infrastructure investment companies. They have a 32% stake in this asset category, which is roughly the same as two years ago.
• Institutions hold 83% of the private equity asset category.
• Private investors are the dominant investor type in several mainstream equity sectors, including UK Equity Income (55%), Global Smaller Companies (50%), Global (50%) and Global Equity Income (49%).

To read the full report, click here.

Adviser platforms

Separate data from ISS Financial Clarity reveals that total purchases of investment companies on adviser platforms amounted to £852 million in 2024. However, there were also sales of £1.11 billion, resulting in negative net demand of £254 million as the cost disclosure rules continued to deter advisers and wealth managers from including investment companies in portfolios and a broader shift towards passive investments continued.

The average number of firms purchasing investment companies on adviser platforms was 1,728 last year¹, and the sector seeing the highest net demand was Renewable Energy Infrastructure, which now offers an average yield of 10.2%. Looking at purchases only, and ignoring sales, the most purchased sector was Global, accounting for 19% of purchases on adviser platforms.

- ENDS -

Follow us on X @AICPRESS

Notes to editors

1. Based on an average of quarterly data.
2. The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 308 members and the industry has total assets of approximately £274 billion.
3. For more information about the AIC and investment trusts, visit the AIC’s website.
4. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
5. To stop receiving AIC press releases, please contact the communications team.