Fiduciary managers pick up institutional business

Two fiduciary management providers, SEI and BlackRock, have announced significant institutional investment wins, indicative of a trend for larger defined benefit (DB) pension funds to switch to an outsourced provider.

SEI said it has gained £1.7 billion in new assets in the 12 months to the end of June 2017, won through competitive tenders. SEI managing director for its institutional group for Europe, Patrick Disney, commented: “It is particularly positive to see our client base expanding to include schemes of more than £1 billion, as larger pension schemes recognise the value of working with a fiduciary manager. We expect this trend to continue over the coming years.” Disney added that another factor in SEI’s success was a growing consensus in the market that a specialist approach to fiduciary management is desired by trustees. “This is particularly pertinent in light of the FCA’s recent Asset Management Market Study, which identified significant concerns regarding conflicts of interest amongst investment consultants offering both a fiduciary management and traditional consulting business model.”

BlackRock was appointed fiduciary manager by the IPC Media Pension Scheme, which has scheme assets of £600 million. BlackRock will advise on the pension fund’s strategic asset allocation, as well as its journey management framework, following an extensive analysis of potential downside scenarios. It will also provide advice, training and support for the trustee as part of the transition to the new arrangement. The mandate also included open architecture manager search, selection, de-selection and complete implementation services across all asset classes.

IPC Media Pension Trustee chair, Susan Andrews, commented: “Appointing a fiduciary manager was a big step for us, but the trustee and scheme sponsor were convinced that in a changing environment this was the right time and an appropriate way to change how we manage the scheme’s investment arrangements.” BlackRock head of UK strategic clients, Andrew Tunningley, added: “Fiduciary management services are increasingly sought after by clients in the current environment of low returns, heightened regulatory scrutiny and operational risks.”