Opalesque Industry Update - Recovery in Q3 2010: are we back on track? |
Approved Persons and net new business authorisations back up
Following the decline in Approved Person and net business authorisations in Q2 2010, Q3 2010 shows an improvement in Approved Persons employment and net new corporate authorisations.
Net FSA authorisation of new entities is now at its strongest position since Q2 2008 with the potential prospect of net positive authorisations (after cancellations) in the foreseeable future. This has only been achieved in one quarter (Q2 2007) over the past four years.
After concerns of a double dip in the last quarter, this quarter’s data appears to suggest that last quarter was a temporary blip in the steady progress of a recovery in the UK financial services industry.
Hedge fund authorisations up in the quarter although overall
Approved Person employment down year to date Authorisation of new hedge funds has seen strong growth in Q3 2010 at over one third of all new authorisations in the ‘Financial Investment’ sector and over 50% increase on Q2 2010.
Year to date, however, large hedge fund employment is down 24%, with over 85% of large hedge funds showing flat or reduced Approved Person employment in the first three quarters of 2010.
Consistent overseas interest throughout 2010 with North America
continuing to consolidate its leadership role Despite weaknesses in the global economy, overseas investors have continued to consistently support newly authorised entities throughout 2010, representing between 12% and 18% of all quarterly authorisations excluding IFAs.
North America also continues to build its presence given its interest in 52% and 58% of the overseas-owned authorisations in Q2 2010 and Q3 2010 respectively.
Again, the significance of the emerging markets continues with Asia and Africa together surpassing Europe’s ownership of newly authorised entities in Q3 2010.