March 16, 2020
The outsourced chief investment officer business continues to evolve. While OCIO providers still reach out to the industry’s traditional base of defined benefit clients, the second phase is adding business from other institutional investors. According to Pensions & Investments’ latest annual survey, worldwide assets managed by OCIO providers rose 4.7% to $1.82 trillion for the 12 months ended March 31. In the U.S., OCIO managers saw a 67.2% jump in outsourced assets under management, with U.S. endowments at $47.6 billion as of March 31, while mandates with U.S. defined contribution clients grew 44.2% to $164 billion.
Those aren’t the only areas of growth. Business from nonprofit, insurance and health-care clients is growing as well.
Overall, the understanding of what external management of institutional client assets can provide has moved from the education phase to being a more understood and accepted strategy among institutional investors. As a result, those investors have a better handle on what they need from OCIOs and who can provide that for them.
P&I discussed these topics in a roundtable discussion with Heather Myers, partner and nonprofit practice leader at Aon; Thomas Meyers, executive director, head of Americas client solutions, Aviva Investors Americas; and Rich Joseph, wealth distribution leader at Mercer.
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