The New Gatekeepers: Winning Business Models for Investment Outsourcing

Intro to OCIO
Industry Resources
OCIO Models
Casey Quirk & Associates
| December 01, 2008

Defining Investments Outsourcing Investments outsourcing takes on many shapes and is often defined differently by various market participants. For the purposes of our research, we currently define investments outsourcing simply as: “When an investor delegates 100% of its assets and some level of investment discretion to a third party for a portfolio-based fee.” Many institutional investors, however, allocate less than 100%, but significant portions, of their portfolios in broad mandates to investments outsourcing firms. Examples of such assignments include oversight of the alternative investments portion of the portfolio, or an unconstrained mandate with fairly broad investment freedom to achieve a return objective. Another way to further define and understand investments outsourcing, at least in the context of the institutional market segment, involves comparing it to a traditional investment consultant investor relationship. Investments outsourcing is distinctly different in a number of ways, including greater levels of discretion, asset- and performance-based compensation arrangements, and a wider use of proprietary vehicles, including many focused on alternative investments.

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