The growth of the fiduciary management sector is being boosted by larger defined benefit (DB) pension schemes exploring outsourcing options – helping to offset the effect of others moving to buyout.
Quantum Advisory’s latest quarterly report highlighted five new awards worth more than £500m, including a £740m mandate for Schroders to run Aga Rangemaster’s DB scheme and WTW’s £1.2bn mandate to oversee the Plumbing & Mechanical Services Industry Pension Scheme’s portfolio.
At the end of the second half of 2025, Quantum’s data showed that fiduciary managers oversaw £114bn for UK DB pension schemes. This figure does not include the BT Pension Scheme, which is managed by its subsidiary Brightwell, or the £11.1bn Shell Contributory Pension Plan’s outsourcing agreement with Goldman Sachs.
“The growth in mandates is encouraging, but it’s clear the market must work hard just to hold its ground, given the move to buyouts.”
Paul Francis, Quantum Advisory
The report also showed a continuing derisking trend among fiduciary managers. Overall, more managers are targeting lower levels of return, are using higher levels of hedging, and allocating more to matching assets.
At the same time, more than 50 fiduciary management mandates converted to bulk annuities during the 12 months to the end of June 2025, Quantum found.
Paul Francis, principal investment consultant at Quantum Advisory, said the fiduciary management sector was beginning to “evolve structurally”.
“Larger schemes are increasingly adopting fiduciary manager or outsourced CIO arrangements, but smaller schemes still make up the bulk of the market by number,” Francis said.
“The growth in mandates is encouraging, but it’s clear the market must work hard just to hold its ground, given the move to buyouts. That said, interest in fiduciary models remains high, especially as market complexity increases.”
Quantum also highlighted recent guidance from the Pensions Regulator that has expanded the endgame options available for DB pension scheme trustees.
Anne-Marie Gillon, also a principal investment consultant at Quantum, said trustees needed to “dig deeper into the specifics” of their fiduciary manager’s offering, looking at “how well a provider understands their objectives, how agile their strategy is, and how much genuine oversight is built in”.
Gillon added: “It’s important trustees and employers cut through the noise, so they can stay aligned with both market opportunities and their long-term goals.”
Quantum’s data also showed that fees for smaller mandates ticked higher over the 12 months to the end of June, but the model portfolios analysed by the consultancy generally outperformed diversified growth funds. Five of the 11 portfolios also outperformed global equities over the period, with lower volatility.
The consultancy said those managers with larger allocations to alternatives typically experienced stronger risk-adjusted returns, but emphasised that returns still “varied notably” between those with similar strategic asset allocations.
