Greater reliance on active managers could help grow investment funds, according to Spence and Partners.

This is one of the strategies proposed by Simon Cohen, head of investment at Spence and Partners, as he outlined measures to gain extra returns in a low-yield environment.
Speaking at an event in London, he added investors should also be more proactive in improving funding positions.
"You need to be smart and more dynamic, so you should be taking advantage of market opportunities when they arrive," he said.
Illiquid asset classes, such as property or private equity, were another recommendation, particularly for pension schemes, as these schemes have a long-term time horizons.
Cohen explained that pension schemes do not need access to their assets in the short to medium term, adding: "By choosing those types of investments they can pick up extra returns by locking away their assets for two to nine years."
Another source of greater return was direct lending. For instance, Cohen pointed out recent situations where banks refused to lend to SMEs because of capital requirements and the credit crunch.
"There's a hole in the loans market and pensions schemes can fill in that hole," he said.
"A lot of these pension plans are maturing. Their time horizons are shorter but still longer than retail investors or other investors such as banks. They can take advantage of that longer time period to invest their assets to get a premium for having their assets locked away."
To mitigate the risk of volatility, Cohen suggested diversified growth funds (DGFs), which invest in a wide variety of asset classes.
These have become popular in the past two to three years because they provide diversification to pension schemes, according to Cohen. If a fund does not perform, others can offset the losses.
"They give pension schemes lots of different types of asset classes under one fund," Cohen said. "The idea is to give you a nice steady return".
However, he warned DGFs had "significantly underperformed" in the market over the past five years.
"They haven't lived up to expectations. They actually performed a lot worse than equities. However, they happened to be less volatile."
Another method to take control over volatility was implementing a trigger. This means placing a market condition which prompts change, such as selling shares of a stock if the price reaches a certain level.
Based on a client's case study, he said by setting a trigger the volatility of a pension fund was reduced and funding level improved.