Institutional investors increasingly turning to OCIOs
05 June 2018 New York
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Institutional investors are increasingly turning to outsourced chief investment officers (OCIOs) to streamline operations and gain access to new asset classes, a new report from BNY Mellon Asset Servicing has explored.
The report titled, The Outsourcer’s Dilema: OCIO providers strive to simplify complex investing,
found that funds invested through OCIOs were predominately focused on endowments and foundations at 33 percent.
This was followed by defined benefit pensions at 30 percent, based on 33 OCIOs in Q1 2018.
Over the next five years, OCIO providers anticipate that the demand for their services will be strongest among endowments and foundations, the report found.
According to the report, they also anticipate that mid-sized institutions with $250 million to $500 million in assets under management (AUM) will be the biggest source of growth.
Additionally, almost one in five respondents predict institutions with more than $1 billion in AUM will be the largest source of new assets over the same period.
The report also revealed that more than half of the OCIO providers surveyed employ more than five external service providers to help fulfil client mandates, and a third of firms use more than ten.
Commenting on the report, Elizabeth Baulch, head of OCIO strategy and solutions, BNY Mellon Asset Servicing, said: “As investors are turning to OCIO providers to manage the increasing complexity of their portfolios and to gain access to new asset classes, the OCIOs need partners who can support the nuances of these investment options.”
Bob Dollard, public funds segment manager, BNY Mellon Asset Servicing, added: “The best-in-class service providers are the ones who can anticipate the unique challenges of OCIO providers and tailor their solutions, particularly in the in areas of data aggregation, reporting and risk management.”
The report titled, The Outsourcer’s Dilema: OCIO providers strive to simplify complex investing,
found that funds invested through OCIOs were predominately focused on endowments and foundations at 33 percent.
This was followed by defined benefit pensions at 30 percent, based on 33 OCIOs in Q1 2018.
Over the next five years, OCIO providers anticipate that the demand for their services will be strongest among endowments and foundations, the report found.
According to the report, they also anticipate that mid-sized institutions with $250 million to $500 million in assets under management (AUM) will be the biggest source of growth.
Additionally, almost one in five respondents predict institutions with more than $1 billion in AUM will be the largest source of new assets over the same period.
The report also revealed that more than half of the OCIO providers surveyed employ more than five external service providers to help fulfil client mandates, and a third of firms use more than ten.
Commenting on the report, Elizabeth Baulch, head of OCIO strategy and solutions, BNY Mellon Asset Servicing, said: “As investors are turning to OCIO providers to manage the increasing complexity of their portfolios and to gain access to new asset classes, the OCIOs need partners who can support the nuances of these investment options.”
Bob Dollard, public funds segment manager, BNY Mellon Asset Servicing, added: “The best-in-class service providers are the ones who can anticipate the unique challenges of OCIO providers and tailor their solutions, particularly in the in areas of data aggregation, reporting and risk management.”
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