Assets in the UK’s fund management sector have recovered since the 2008 financial crisis and are likely to reach a new record this year, marking the seventh successive year of growth.

Assets under management increased by 9.7% to a record £6.8 ($10.4) trillion in 2014 according to TheCityUK, a body created in 2010 to champion the country’s  financial services industry. This was the sixth successive year of growth and due to both inflows and returns.

TheCityUK estimated that funds managed in the UK grew between 4% and 5%  to £7.1 trillion in the first half of this year and the full year increase is likely to be more than 9%.

Funds in the UK managed  £2.5 trillion on behalf of overseas clients, which makes the country the leading global location for management of funds on behalf of foreign clients according to the report. In addition more than half, 57%, of assets managed in the UK are looked after by fund managers with overseas parent organisations, up from 39% a decade ago. About 40% of the large and medium-sized firms in London are owned by overseas investors.

The report said: “The UK has become the second largest centre for fund management after the US, and continues to dominate the industry in Europe. Funds managed in the UK are bigger than the combined total of funds managed in the next three largest European centres.”

TheCityUK expects the UK to benefit from cross-border investment opportunities as state pension systems around the world are reformed and privatised.

“In particular, Asian countries and other emerging markets are looking more at opportunities to invest via European products and domiciles,” added the report.

This year China Construction Bank International, via HSBC and Commerzbank. launched the first fund in Europe which can be traded in sterling, euros or renminbi. The RMB Qualified Institutional Investor (RQFII) exchange-traded money market fund is listed on the London Stock Exchange and domiciled in the UK.

The report said ETF/ETP industry assets continued to record faster growth than the wider fund management industry in 2014, reaching a record high of $3 trillion.

In order to make the UK a more attractive destination for fund management activities the Financial Conduct Authority, the UK regulator, has reduced fund authorisation times. From April last year the FCA introduced voluntary targets to reduce the time to authorisation from six months to three months for non-UCITS retail schemes and two months for Qualified Investor Schemes. In April 2015 these were further reduced to two months and one month respectively.

The report said: “The FCA has made good progress towards meeting these voluntary targets through the introduction of a more detailed application process, reducing the need to refer applications back to authorised fund managers.”

TheCityUK said that alongside potential growth opportunities, technology is disrupting the financial services industry. “The interactivity of technological advancement, changing consumer expectations and the perception that industry costs remain inflated is forcing the industry both to make better use of technology and to change how asset managers engage with their customers,” added the report.

This week the FCA launched a review of competition in the asset management industry which will cover charges and whether there are barriers to innovation or technological advances.