Data from the UK government’s Scottish office indicates that financial services within Scotland contributes about 8 per cent of total GDP and employs around 200,000 people.
That figure of course includes a very broad range of businesses, from FTSE 100 banks to one-man-band advice firms.
But as with the rest of the financial services universe, consolidation has been a feature, as has the growth of a small number of behemoth firms who now dominate the metaphorical skyline.
One of those that has grown rapidly in recent years is Baillie Gifford, which ran £230bn of assets from its headquarters in Edinburgh at the end of March 2024, and employs 1,816 people – an increase of several hundred since 2021.
James Budden, head of retail distribution and marketing at the firm, tells FT Adviser: “When I came to Baillie Gifford 15 years ago, the assets were 90 per cent institutional and almost all of the employees were in Edinburgh. The only other place where there was a footprint was New York.
"That business model, which involved having a small number of big clients, had to change as a result of the move from defined benefit pension schemes, which were the bulk of the assets we ran, to defined contribution schemes."
For him, that means doing business is "more complex, and there are more intermediaries between the asset manager and the end client".
As a result, it forced the company to think bigger.
He explains: "In that world, you can’t be insular. We now have offices in Asia as well other parts of the US and in London and China, which means we need boots on the ground.
"When I joined Baillie Gifford, I was obliged to relocate to Edinburgh for the job; that has changed now, staff aren’t obliged to."
He says Edinburgh has a “community” of fund managers and financial services firms that can serve the asset management firms that operate within the city.
From an investment management perspective, he regards it as a positive that many of the fund managers are away from the “noise” of the City of London, but says employees of the firm are “continually up and down to London, because that is where the fund selectors and counterparties are".
Drawing talent into the company
Recruitment policies have evolved in recent years. While there remain plenty of Edinburgh University and Oxford and Cambridge graduates, now there are bright recruits coming in from all around the world into Edinburgh, as well as new programmes designed to help improve social mobility.
For some groups, they are attracting not just for graduates but also more experienced managers wanting a change of life.
Mark Murray, managing partner at Artemis, says: “The fund management sector in Edinburgh is not as big as it was, but there’s enough of a centre of gravity to draw company managements to Edinburgh for meetings.
