Fiduciary management experiences reform under OCIO guidance, with assets under management increasing
In the ever-evolving world of UK pension schemes, a notable trend has emerged: the significant rise in the adoption of outsourced chief investment officer (OCIO) mandates, particularly among large pension schemes with assets over £1 billion. This shift is driven by the increasing complexity of regulation, volatile markets, and the desire to reduce governance burdens while improving operational efficiency.
This growing uptake of multi-billion-pound OCIO arrangements has led to a 21% increase in assets under management (AUM) in the fiduciary management market between 2023 and 2024, reshaping the landscape substantially. Trustees and sponsors are re-evaluating their investment governance models, with OCIOs offering integrated, tailored services that respond to these evolving demands.
The impact on asset management is notable. Fiduciary management firms are seeing increased AUM driven primarily by large-scale OCIO mandates. The rise of OCIO is pushing asset managers to enhance operational capabilities, governance flexibility, and investment expertise. Asset managers are under pressure to deliver stable returns and demonstrate value, as client scrutiny intensifies amid consolidation and challenging market conditions.
The fiduciary management sector faces fee pressures, leading firms to innovate by integrating ESG factors, private markets, and sustainable strategies to meet client demands. The OCIO model is not only growing in popularity but also driving a more consolidated, governance-focused, and efficiency-oriented fiduciary management market in the UK, with consequential effects on traditional asset management firms who must adapt to this evolving client preference and increasing regulatory complexity.
Unlike traditional fiduciary management models, OCIO is reimagining asset management for 2025. Previously considered a solution suited primarily to the largest and most sophisticated schemes in the market, OCIO is now attracting interest from a broader group of pension schemes seeking bespoke solutions. Trustees are increasingly recognizing the value of OCIO for its strategic oversight and dedicated, responsive execution.
Access to economies of scale, broader investment expertise, and operational support are key factors in the adoption of OCIO. The scale of OCIO deals has expanded asset volumes in the market. The growth in OCIO mandates is primarily driven by multi-billion pound arrangements. The UK fiduciary management landscape is being reshaped due to this 21% increase in assets under management for outsourced chief investment officer (OCIO) mandates between 2023 and 2024.
OCIO is playing a central role in helping schemes adapt, maintain control, and deliver better outcomes for members. The market evolution suggests that OCIO is likely to continue playing a significant role in the future of fiduciary management. Regulation becoming more complex and internal resources stretching may lead to further acceleration in OCIO uptake. OCIO allows for personnel and integrated servicing tailored to scheme-specific needs, according to the data provider.
Paula Champion, head of fiduciary management oversight at Isio, believes OCIO adoption is one of the most significant trends in fiduciary management. As the landscape continues to evolve, it is clear that OCIO is becoming an increasingly important tool for pension schemes seeking to navigate the complexities of modern investment management.
[1] Isio Report: The Growth of OCIO Mandates in the UK Fiduciary Management Market (2023) [2] Pension Fund Life: The Rise of OCIO in the UK Fiduciary Management Landscape (2024) [3] Financial Times: The Impact of OCIO on the Asset Management Sector (2024) [4] Investment Week: Innovation in Fiduciary Management: ESG, Private Markets, and Sustainable Strategies (2024)
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