Journalists are used to receiving an email shortly after an interview in which the interviewee – or his PR reps – entreats them to tone down strongly-worded comments.

But every now and then an interviewee wants to up the ante, as Russell Investments’ Shamindra Perera did when he added a statement to the conversation we’d had about pension consultants: “We are currently engaged in a fiduciary management search process where it is between us and the incumbent consultant and the trustees haven’t even bothered to meet with us.”

That decision betrays the feeling among smaller fiduciary managers and consultants that the ‘big three’ have chunks of the UK market sewn-up. But while current statistics support them, more important is the trend – and it seems to me that the dominance of the big three is waning.

The most persuasive explanation for this points to the shift from asset management in the 1990s to asset and liability management and LDI in the 2000s. The big three set themselves up when pension schemes sought advice from big teams built to select from a global menu of

specialist active managers. The smaller consultants established since are adapted to today’s world of scheme-specific solutions, which trustees want implemented efficiently from a tighter universe of providers of commoditised products – such as interest rate derivatives from banks or passive investments from the asset management giants. 

Of course, not everyone wants to go passive, so manager search services persist, but the desire of these trustees to cut back on costly ongoing advice explains the interest in smart beta. 

The search for absolute returns from hedge funds seemed to offer a brave new outlet for all the resources of the big three. They even had a good swipe at usurping funds of funds as the chief intermediaries in this effort. 

But that moment is passing, too. As we went to press IPE broke the story that PGGM was ready to sell its managed account platform, just four years after building it to make its hedge fund allocation more efficient. Its main client, PFZW, is considering cheaper hedge fund clones instead.

Alongside the fashion for simplified systematic investment products on the one hand, there is demand for illiquid cash-flow assets on the other. These can be complex, but are offered by a smaller universe that can be covered by medium-sized consultants. 

The big three are responding by re-packaging what they’ve done over the past 25 years as fiduciary management for smaller DB schemes and commoditised products for the growing DC market. But if ‘peak big three’ has indeed passed among the largest buyers of their resource-intensive services, they will need to think radically to maintain market share.