Why it may be time to hire an OCIO

Learn more about the benefits of an outsourced chief investment officer, including why one might be right for your institution.

What is an OCIO?

An Outsourced Chief Investment Officer – or an OCIO, for short - is the term used to describe a third-party consultant or firm who provides investment management services to an organization that does not have its own internal investing capabilities.

By outsourcing this core function, the organization can benefit from the OCIO’s time, expertise, and access to resources, without having to go through the expense and learning curve that can come with building an in-house portfolio management team.

Understanding the benefits of an OCIO

For certain organizations, an outsourced chief investment officer can allow them to experience the best of both worlds: having a fiduciary who has the time, knowledge, and skillset to provide optimal investment services, while preserving resources that would have otherwise been spent on spinning up an internal investing function.

1. Accessing tailored investment services and offerings.
The OCIO collaborates directly with their clients to create custom investment strategies designed to achieve their targeted goals. Additionally, OCIOs can provide clients with investment opportunities via new and emerging asset classes and vehicles, like alternatives, active ETFs, and more.

2. Unlocking specialized research and resources.
Some OCIO firms come with proprietary research and resources that can complement their investment services, all of which can help optimize their clients’ portfolio performance.

3. Anticipating and adapting to market shifts.
Because an OCIO’s day-to-day responsibilities include monitoring market performance, they may be in a better position to deploy agile decision-making to ensure an organization’s investments are protected in uncertain environments – or to take advantage of favorable market conditions.

4. Creating resilient, scalable practices for long-term growth.
An OCIO can give clients a big picture view of future risks and opportunities, and help organizations build foundational strategies to maintain growth during challenging times.

5. Focusing more on what matters.
By eliminating the need for an in-house investment team, OCIOs make it possible for organizations to focus their energy and resources on the things that matter, like their mission, philanthropic outreach, or core business activities.

Learn more about the benefits of OCIO solutions for endowments and foundations.

Outsourced CIO

Discover how Outsourced Chief Investment Officer (OCIO) solutions leverage the deep investment capabilities and proprietary research at Fidelity to deliver competitive outcomes for complex investment needs.

Who can benefit from an OCIO?

Any organization that wants to remain accountable to and in control of its investment objectives while benefiting from the research and expertise of a third-party investment manager may want to consider using an OCIO.

A few examples of organizations that may benefit from an outsourced chief investment office include:

  • Endowments
  • Foundations and other charitable organizations
  • Pension fund providers
  • Businesses with employee retirement plans
  • Insurance companies
  • Trusts
  • Healthcare providers

The impact of OCIO on governance

OCIO services can have a profound impact on an institution’s governance model, especially with regards to dedicating the right amount of time and resources to making agile investment decisions in today’s fast-paced market.

Traditional governance models may not be quick or agile enough to keep up with today’s investment challenges and risks. What’s more, market volatility could make it tempting for an organization’s board to make premature decisions that may undermine their long-term investment strategies.

Rather than relying on decisions made on a quarterly basis – which is typically done within a traditional governance model – an institution can utilize their outsourced CIO to monitor market shifts and make same-day investment decisions for them.

Additionally, those nimble decisions are typically backed by deep investment expertise and global research capabilities, much of which is frequently refined and updated as new market data becomes available or as the regulatory environment changes.

By incorporating an OCIO firm into a governance process, organizations can maintain strategic control over their investments while preparing themselves for the unknown.

Maximizing resources with an OCIO

Resources are finite, especially for non-profit organizations that may need to do more with less. Although ongoing market monitoring and portfolio optimizations may be critical to the institution’s success, it could be too costly or time-consuming to spin up an in-house investing function.

An outsourced CIO can help address these resource challenges by taking on the function of an in-house investment team without requiring significant expense, time, and infrastructure. That means the organization can focus on what really matters: achieving its core mission.

Want to know more?

Let’s talk about outsourced CIO solutions.