For those UK pension schemes that wanted to reduce their investment risks, the choice used to be simple. They hired BlackRock, Insight Investment or Legal & General Investment Management.

The three firms dominate the market for liability-driven investments, or LDI. This is an investment approach that offers to cover schemes against financial risks, principally rising inflation and falling interest rates, both of which increase pension liabilities. About a third of UK pension liabilities, or £446 billion, are now hedged in this way, and these three firms manage 90% of that money.