Who owns investment companies? Data reveals institutional dominance

Institutions hold half of all the shares in investment companies by value, or £89bn of the holdings, according to new data from the Association of Investment Companies (AIC).

Analysing £177bn of shareholdings, or 87 per cent of the industry’s total market cap, the data revealed that wealth managers hold 25 per cent of all shares, with private investors holding 23 per cent and adviser platforms two per cent.

When looking specifically at equity investment companies, the splits are a lot more even, with institutions holding 36 per cent, private investors 33 per cent, wealth managers 28 per cent and adviser platforms 3 per cent.

Instead, institutions dominate when holding shares in trusts that invest in alternatives, such as property, private equity and debt.

There, 70 per cent of all shares are held by institutions, while wealth managers own 20 per cent, private investors own nine per cent and adviser platforms one per cent.

Institutions hold their largest share in the private equity category, holding 81 per cent of all shares.

Meanwhile, private investors were most invested in global equity income and UK equity income, then in commodities and natural resources, holding 49 per cent, 48 per cent and 43 per cent of all shares by value respectively.

Since 2022, the AIC found that institutions had marginally increased their share proportion in investment companies, taking one percentage point from wealth managers, largely due to a three percentage point shift in alternatives.

The largest institutional investor in trusts in Blackrock, holding 2.5 per cent of total industry market cap, or £4.4bn.

The most significant private investor platforms for investment companies are Hargreaves Lansdown and interactive investor, holding 6.9 per cent and six per cent of total market cap respectively.

Richard Stone, chief executive of the 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.”