Industry Resources

The market for outsourced investment teams is “red hot” thanks to the darkening outlook for future returns, with allocators of capital increasingly delegating entire multibillion-dollar mandates to outside money managers. 

The year ended March 31 was a strong one for OCIO managers, many of which had double-digit growth in assets under management thanks to a wave of new clients and strong performance.

The overwhelming reason that institutional investors outsource investment management is a lack of internal resources.

The pandemic has challenged everyone in many ways ― personally and professionally. The coronavirus has forced investment managers and their clients to grapple with yet another black swan crisis just over a decade since the last one.

In a Cerulli survey released in November 2020, 91% of search firms sampled said inadequate communication around investment performance was a challenge with OCIO providers, with more than a quarter saying it was a significant challenge. This aspect was the s

The OCIO market is one of those segments of the investment world that is seeing a significant increase in growth. Not only are managers that were created solely as OCIOs finding new opportunities, more traditional managers, including large fund complexes, are also being drawn into this market.

Endowments are an increasingly precious resource to cover rising costs, strengthen financial resilience, support important initiatives, and help keep higher education affordable. The work of a college or university investment committee member has never been more important.

The strong growth of OCIO assets in the year ended March 31 likely will accelerate as institutional investors evaluate their funds' performance during the market turmoil in the first quarter and elect to outsource portfolio management, said OCIO managers and industry observers.

Why do asset owners hire outsourced chief investment officers? To help them get the returns they want. As common-sensical as that sounds, this quest for good performance is woven into the OCIO appeal in a way that benefits the owners more than many realize.

The chief responsibility of an OCIO is to act as a trusted advisor and a co-fiduciary. Alignment, trust, transparency, and a spirit of partnership are critical ingredients of a successful OCIO relationship.

Fees and expenses are always an important consideration in selecting an OCIO provider and asking detailed and probing questions of potential providers is critical in a diligence process.

Institutional investors are increasingly outsourcing their investment offices, yet investment committees still have issues with the idea of handing over full oversight of the portfolio to an external firm.