New regulatory guidance, product innovation and market opportunities mean 2026 is the year to look under the bonnet of your scheme’s LDI portfolio, because a quick tyre-kick is unlikely to keep your portfolio roadworthy. We believe all trustees should at a minimum undertake a “MOT” review of their LDI arrangements in 2026, and probably have a full service to really get the most out of existing arrangements.  For many Schemes, upgrading to a new model could more than pay for itself!

We recommend:

• Stress testing collateral waterfalls to ensure these remain efficient and robust. Add diversity and flexibility to your collateral asset pool, including with ABS and use of credit repo/TRS.
• Reviewing the structure and design of your LDI approach, including considering whether a segregated LDI approach could offer better flexibility and value for money.
• Consider upgrading your LDI manager’s toolkit to capture market opportunities.

Credit markets remain tight so schemes must look beyond mainstream assets to boost returns or stay ready to act when conditions shift.

Fund finance and Private Investment Grade Lending may be suitable for the former, with both options providing material yield enhancement relative to traditional corporate bonds.

Separately, establishing a corporate bond purchasing framework or adopting a dislocation strategy can help schemes to take advantage when markets move quickly. We also explore how schemes with credit-heavy portfolios can dig deeper to better understand credit risks.

Amid a challenging macroeconomic backdrop, it has arguably never been more important for investors to choose their ‘growth assets’ wisely.

In 2026, we think it’s important for trustees and sponsors to:

• Focus on a tangible risk premium – Real Assets (e.g. Infrastructure, Property) valuations are underpinned by cashflows from rents or income streams, thereby maximising certainty – there are implementation approaches to suit a variety of objectives.
• Avoid overpaying for equities – could you benefit from a zero-fee fund?
• Access illiquidity sensibly – Utilise your competitive advantage in illiquids, if you still can.

As the fiduciary landscape shifts, one thing is becoming clear: a single model no longer fits every scheme. Trustees are operating at very different stages of maturity, facing distinct risks, priorities and endgames. That’s why agility matters more than ever.

In our latest video, we explore three evolving fiduciary concepts reshaping the market today:

• FM Light
• Implementation‑only models
• Strategic advisor structures