2025 proved challenging for UK fund managers on a net sales basis, but gross sales reached record levels, signaling strong opportunity and money in motion. Benjamin Reed-Hurwitz at ISS Market Intelligence notes that while the industry saw net outflows, 55% of participating managers actually improved sales year-over-year. "Gross sales really represents the opportunity that any one manager can win," he says.

Three key drivers fueled activity: transition in portfolio control toward centralized propositions and model portfolios, changing portfolio construction with greater active-passive blending, and a more global mindset among investors. The year became one of diversification across rates, inflation, geography, and tax changes.

Outsourcing to multi-asset and model portfolio solutions is reshaping flows, with these "portfolio constructors" acting as gatekeepers. This has boosted systematic, enhanced-index, and high-alpha strategies while opening space for absolute return as a diversifier.

Offshore funds also posted positive net sales, reflecting demand for broader choice. Success in this environment requires genuine conviction in philosophy, strong sales engagement with the right partners, and data-driven segmentation to tailor conversations.

The shift toward outsourcing and diversification creates both challenges and fresh opportunities for adaptable managers.

Source: Video - The Rise of New Portfolio Constructors