3 May 2022

The UK and London are still considered prime targets for investment. Financial and professional services, and fintech, widely favored

Despite the pandemic, the downturn in the economy and Brexit, the UK continues to be the preferred target for investment in financial and professional services. That’s according to a new report from the City of London Corporation that focused in part on why the island, and London in particular, continues to attract so many investors compared to other financial centers around the world.

The UK and London still seen as prime investment targets
In 2021, 169 foreign companies were investing £1.1 billion in the UK financial services sector, in 189 different projects. In terms of foreign direct investment (FDI) in financial and professional services (FPS), the UK leads Europe in attractiveness by number of projects. Only the United States does better in the world. London itself accounts for half of the investment, with £600 million in 114 projects. The other 75 projects are located in Manchester, Belfast, Edinburgh and Birmingham, in order of importance.

The largest WPS investments in the UK come from companies in the US and North America, accounting for 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 are from Asia Pacific, Latin America, and the Middle East.

Financial and professional services, and fintech, widely favored
According to the report, the UK is still seen as a very attractive investment opportunity due to the availability of capital, research and development resources and its very stable legal framework. And if we look more closely at the projects that these resources produce, the report explains that fintech accounts for a third. In 2021, 32% of foreign investors came from fintech. The next two largest investor clusters were IT services and investment consultants, with 15 percent each.

The study also looked at the return of the UK post Covid-19. While FDI projects decreased by 30%, 2022 saw an 8% increase in the number of projects, with +66% in investment value. Job creation in the fintech industry is also very promising. Before the pandemic, a project created an average of 29 jobs. By 2021, 44. Before the pandemic, an average project raised an average of £4.5 million. Today, it raises about £5.8 million. And this dynamic is expected to increase further.

Source : Morgan Fromentin, BeGeek