Total assets under management in the UK fiduciary management market have risen 58% over the past three years, according to Quantum Advisory’s latest Fiduciary Management Dashboard.
Around 90% of that growth came from pension funds with assets of £1bn or more, highlighting the sector’s concentration in the largest mandates. At the same time, new fiduciary mandates continue to enter the market, broadly offsetting schemes progressing toward buyout.
More than 55% of mandates now target returns of less than 1.5% above liabilities, reflecting a focus on risk reduction and protecting funding positions.
Anne-Marie Gillon, principal investment consultant at Quantum Advisory, said: “While growth figures reflect the scale of large mandates entering the market, the headline numbers should not discourage smaller and medium-sized schemes from considering fiduciary management. Growth in assets under management is naturally being driven by larger schemes simply because of their size. But that doesn’t mean fiduciary management is only relevant for the largest players in the market.”
She added that fiduciary managers are increasingly adapting investment approaches to a range of market environments.
“In a lower-return world, the emphasis is shifting away from simply taking investment risk in growth portfolios. Instead, there is greater focus on managing cashflows effectively and implementing more precise liability hedging.”
The report also highlights ongoing industry consolidation, citing last month’s acquisition of Schroders Solutions by Nuveen.
Gillon said M&A activity “can bring both opportunities and challenges”, adding: “It’s important for schemes to understand how changes in ownership or operating models might affect the service they receive.”
