Assets managed by the U.K. investment management industry fell to £8.8 trillion ($10.61 trillion) at the end of 2022, a 12% decrease from the previous year, according to the Investment Association’s annual Investment Management Survey.

The survey released Oct. 10 attributed the drop to a broad-based market correction reflecting monetary policy changes, inflation, the Ukraine war and other global uncertainties. “The markets experienced an unusual correlation in the direction of travel for both global equities and bonds,” the survey report said. Sharp drops in the bond market led to a 16% year-over-year drop in assets managed for U.K.-based institutional clients, which reached £3.9 at the end of 2022.

Total investments in the U.K. reached £1.4 trillion, across equities, bonds, infrastructure and property investment, but U.K. equity funds saw outflows of £12 billion in 2022, double the previous year.

Pension funds are still the largest client type at 63% of third-party assets, but are down from 69% in 2021. There were more retail investors, who now hold 24.7% of assets under management in the U.K. That reflects different asset exposure and market outcomes in 2022 and a greater interest in investing that was sparked during the COVD-19 pandemic. After years of little change, the retail share of assets under management in the survey increased to 20% in 2020 and 22% in 2021, now representing £2.2 trillion.

In 2022, turbulence in the gilt market put significant pressure on pension funds, and liability-driven investing strategies were down 28% from the previous year, the survey found. Responsible investment funds also saw slower growth, with inflows of £5.4 billion, compared to £15.9 billion in 2021.

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