I Think I Know What OCIO Is … but What the Heck Is a Strategic Partnership?

Executive summary:

  • An investment program with dedicated but limited internal resources can extend its staff through a strategic partnership with an external investment solutions provider.
  • Examples of assignments that can be transferred to an external provider include equitization, liquidity and rebalancing tasks, exposure management and LDI execution services.
  • The best OCIO providers make strong strategic partners, working side-by-side with resource-challenged internal investment staffs to achieve their desired goals.

I think I know what OCIO is … but what the heck is a strategic partnership?

Here’s the punchline: It’s all about the interrelationship between productivity and resources that allows asset owners to do more with the same.

All asset owners understand that managing an institutional investment program requires resources to support a senior committee that makes policy decisions on behalf of the plan. But internal support for that fiduciary function ranges from virtually none to a broad and sophisticated team of experts. Those with plentiful internal resources may mainly do it themselves or use an investment consultant to augment their in-house capabilities. The OCIO industry at-large sprang up to service those on the sparse end of this spectrum.