Edinburgh told it must raise its game to lure asset finance firms

BUSINESS and political leaders have been warned that Edinburgh is in danger of falling behind rival cities in creating a new hub around asset finance unless there is a step change in luring investment.

The Investment Management Association (IMA) has urged Holyrood and other political centres outside London to regain ground for these “back office” jobs, adding its voice to critics who believe financial hubs such as Dublin and Luxembourg have stolen a march since the late 1980s.

Richard Saunders, chief executive of the IMA, the trade body for the UK’s £3 trillion asset management industry, said: “One of the things the UK needs most right now is new private sector jobs and above all in the regions away from the south-east of England.

“There’s a promising route open in the fund management industry – asset servicing.

“Edinburgh is already well placed to go for it. What it requires is a little bit of political vision in those centres, a willingness to offer proper incentives, and a little bit of the entrepreneurial flair that Dublin and Luxembourg have shown.”

Asset servicing is largely the administration surrounding fund management, ranging from registration of ownership of securities, auditing, the daily calculation of the value of fund units, IT and legal services.

Such services are often based where a fund management operation is domiciled, even if the main body of its asset managers are elsewhere.

Scottish Financial Enterprise, the lobby group for the sector, points out that Edinburgh has attracted a number of asset finance investments. Blackrock has made Edinburgh one of its major European hubs and created some 350 jobs, not just in asset servicing but in portfolio management.

Mark Tennant, SFE chairman, told guests at last year’s annual dinner that “the continued growth of our asset servicing sector, in my view (is) a far too little appreciated success story of the last 15 years or so. I want to see us competing hard over the coming years with Luxembourg and Dublin. Changing EU regulation in this area will present new opportunities and I have no doubt that our members will be quick to seize them.”

However, the IMA says the inertia remains and is now calling for a co-ordinated drive by politicians at Holyrood and elsewhere in the UK, in conjunction with regulators and asset managers, to attract more back office jobs.

Julie Patterson, director of authorised funds and tax at the IMA, said: “We believe there is the potential for thousands of asset servicing jobs to be created in the UK. They don’t have to be sitting in the City of London or Dublin.

Saunders said the tax regime in the UK is now fully competitive with those in Dublin and Luxembourg.

[email protected]