Executive Summary

DB Pension Funding: The most pressing issues for investors - Liability Management for Corporates, and Market Volatility and Asset Allocation for Local Authorities – remain the same year-on-year; ESG implementation has clearly become a more important issue, with 20% of the investors citing it as a key issue. Asset Allocation Dynamics: Equities still represent over half (53%) of Local Authorities’ assets, while LDI (now 29%) and fixed income (28%) comprise the bulk of Corporates’ assets. Over the next three years, Corporates plan to allocate away from equities, multi-asset, and real estate, with LDI and active U.K. credit expected to be the main beneficiaries, as de-risking activity continues. Product Demand & Hiring: 27% of investors plan to hire a manager in the next year; this is on the low end of the historic average. Emerging Trends: Downward fee pressure continues, with about 15% of institutional investors expecting to renegotiate fees.

Methodology

Greenwich Associates’ 33rd annual U.K. institutional investor research is based on in-depth interviews conducted in the first half of 2020 with 329 interviews of the largest institutional funds in the United Kingdom