10 | SPECIAL REPORT WEDNESDAY 21 OCTOBER 2009THE SCOTSMAN
Scotland's asset managers go
from strength to strength
W
ITH more than �600
billion of funds under
the control of Scottish
Financial Enterprise
(SFE) members alone, Scotland's
fundmanagersremainavitalcompo-
nentnotonlyoftheBritishbutindeed
theEuropeanandworldeconomy.
Other sectors in the financial in-
dustries have been badly hit by the
creditcrunch,butfundmanagement
firms were not so heavily damaged,
and SFE says the Scottish-based
companies still employ 3,300 people
inScotlandand13,000worldwide.
Perhaps more importantly, while
thereputationsofcertainbankswere
trashed, Scottish fund managers re-
tained their good name, and held on
to their share of the global asset
managementbusiness.
It is surely a sign of continuing
confidence in Scottish financial
services that so many people's pen-
sions are invested by fund managers
here. The Investment Management
Association, the UK trade association
for fund managers, recently esti-
mated that 14 per cent of all of
Britain's assets are still managed out
of Edinburgh alone. It may have
helped that such names as Insight
and Scottish Widows Investment
Partnership (SWIP) hid the fact that
thesetwogroupswerepartofHalifax
Bank of Scotland and LloydsTSB re-
spectively, but such is the strength of
the Scottish Widows brand in partic-
ular that it is unlikely any ordinary
member of the public would have
knownorcaredwhoownedthefirm�
andSWIPissettogofromstrengthto
strength,asweshallsee.
Given recent rises in stock market
value,itwouldseemtobeagoodtime
to be a fund manager, but though
Scottish asset management overall
hasretainedthenumbersemployed,it
hasneverthelessseenanoverallreduc-
tion of the number of major institu-
tions headquartered in Scotland due
tomergersandacquisitions(M&As)in
theglobalfinancialindustry.
Beingabletoadapttotheseemingly
ever-changing nature of the industry
has been key to the survival of Scot-
land's investment managers, as SFE
preferstocallthem.
The sector's major players such as
SWIP, now part of the Lloyds Banking
Group,havebeenforcedintoamalga-
mationsandmergerssimplybecause
the tectonic plates of UK banking
shifted.InthecaseofSWIP,thatmeant
good news for the group based in
Edinburgh, with massive changes
taking place at Morrison Street and
elsewhere just now, following an an-
nouncementinAugust.
WithLloydsBankingGrouptaking
overHalifaxBankofScotland,includ-
ing its Insight asset management
arm, it was clear that changes would
be made on the investment manage-
ment side of the business, and it was
SWIP that won out. Lloyds decided
that SWIP would become a centre of
excellence for the group's asset man-
agement activity. At the time of the
announcement, SWIP had �83bn of
assets under management and, after
the intended transfer of approxi-
mately �42bn from Insight, this will
increasetoapproximately�125bn.
The transfer consists of the "inter-
nal" operations of HBOS � Lloyds will
move to SWIP the investment man-
agement of the funds sourced from
Despite other sectors being badly hit by the credit
crunch, MartinHannanfinds that some home-grown
companies are enjoying their share of success

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