There are signs that the four major pension fund managers in the UK are losing market share to smaller groups because of underperformance.
The 1997 Pension Fund Statistics released by the Combined Actuarial Performance Services last week shows Gartmore, Schroder, PDFM and Mercury Asset Management all losing ground to smaller pension fund managers.
The market share of new business for the "big four" fell to 38 per cent in 1997, demonstrating the increasing presence of other managers as well as specialist and indexed mandates.
In 1993, more than half the new appointments were shared between the big four.
At the end of 1997/80 per cent of balanced, discretionary and segregated portfolios were managed by just 16 per cent of fund managers.
CAPS chief executive John Clamp says as UK pension funds become more mature, the number of discretionary portfolios is decreasing.
As the big managers come under business and performance pressures, there is clearly scope for managers other than the "big four" to start picking up discretionary mandates.
The median return among the four biggest asset managers was 14.9 per cent in 1997, which was 0.7 of a percentage point less than the average for discretionary portfolios.
Measured over five years, the big firms marginally outperformed with a 13.9 per cent return compared with an overall average of 13.8 per cent.
Gartmore head of corporate communications Peter Yandle says Gartmore is a growth investment house and it has favoured the mid to small-capitalisation stocks.
He says: "We believe that equity markets at the moment are very highly valued and under those circumstances we sought to be cautious, so we were caught out."
He says Gartmore now picks up business from a much broader base, including specialist portfolios and indexed funds.