ACS funds predicted to hit £250bn by 2017

Widespread appetite for UK Authorised Contractual Scheme (ACS) funds could see them reach assets under management of over £250 billion by the end of next year, according to a survey of financial professionals.

The survey of 50 delegates at a recent Northern Trust seminar found half expect a significant surge in the popularity of ACS funds, while a further 22% predicted total assets under management for these funds could hit as much as £500 billion.

Delegates said that the UK’s double taxation treaty networik was one of the country’s key strengths in attractive tax-transparent fund business, with tax efficiency being one of the key drivers for launching ACS funds.

“The ACS’s transparent structure means investors benefit from applicable tax treaties and are treated as if they were a direct investor into those assets,” said Phillip Caldwell, global head of cross-border pooling product at Northern Trust. “This removes tax drag resulting in better outcomes for investors and higher fund values for investment managers. Our poll shows there is also a growing awareness of its other benefits across fund rationalization, regulatory and reporting, and distribution outcomes.”

The data follows a recent report from HSBC, which stated that 2015 had seen a huge surge in interest in ACS funds among asset managers, again due to the tax efficiency offered. ACS was launched by the UK government in 2013, with the aim of strengthening the UK’s position as a major fund domicile.