The UK and London are still considered the top investment destinations. Financial and professional services, as well as fintech, have gained wide acceptance.
Despite the pandemic, the economic downturn and Brexit, the UK continues to be a preferred investment destination for financial and professional services. That’s what follows from a new report from the City of London Corporation, which focused on understanding why the island, and London in particular, continues to attract so many investors compared to other financial centers in the world.
UK and London continue to be top investment destinations
In 2021, 169 overseas companies invested £1.1 billion in the UK financial services sector through 189 different projects. In terms of foreign direct investment (FDI) in financial and professional services (FPS), the UK ranks first in Europe in terms of attractiveness in terms of the number of projects. Only the United States is doing better in the world. London accounts for half of the investment: £600 million across 114 projects. The remaining 75 projects are located in Manchester, Belfast, Edinburgh and Birmingham, in order of importance.
The largest investment in FPS in the UK is in the US and North America (42%), followed by Western Europe (31%) and Asia Pacific (17%). But while these regions provide the most prolific investors, four of the top 10 corporate investors in 2021 came from Asia Pacific, Latin America and the Middle East.
Widely accepted financial and professional services and fintech
According to the report, the UK continues to be seen as a very attractive investment opportunity due to the availability of capital, R&D resources and a very stable legal framework. And if you take a closer look at the projects that produce these resources, the report explains that a third is fintech. In 2021, 32% of foreign investors came from fintech. The next two largest investor clusters were IT services and investment advisors, with 15% each.
The study also looked at the return of the United Kingdom after Covid-19. While FDI projects decreased by 30%, in 2022 the number of projects will increase by 8%, and the value of investments will be +66%. Creating jobs in the fintech industry is also very promising. Before the pandemic, the project created an average of 29 jobs. 44 in 2021. Before the pandemic, the average project raised an average of £4.5m. Today about 5.8 million pounds. And this momentum should be further strengthened.