OCIO Fundamentals

Bringing together all you need to know about outsourced CIO.

What is OCIO? How can OCIO help? OCIO myth-busting What to look for Recent articles on OCIO Contact us

What is OCIO?


OCIO stands for Outsourced Chief Investment Officer. This is when an organization delegates either some or all of the day-to-day management of its investment portfolio to a qualified firm. By hiring an OCIO, you retain control over important decisions like strategic asset allocation. Your OCIO partner manages the day-to-day investment management.

How OCIO can help your organization

Choosing the right OCIO partner

OCIO stands for outsourced chief investment officer or, in plain English, outsourced investment management. The term refers to the full or partial outsourcing of your organization's investment function to a third party, like us. Your organization maintains control over the decisions that matter the most to you, such as strategic asset allocation, but the other fiduciary duties are handled by our robust team. Why should you consider OCIO? Here are the four reasons we think will matter the most to you.

For many asset owners, managing an institutional investment program is a sideline; it's important, but let's face it, your organization is likely not in the portfolio investment business, so does running your portfolio take time away from focusing on your mission? With the right OCIO provider, your portfolio is managed by experienced fiduciary professionals ones who understand how to use the best talent and technology to create tailored portfolios while managing your risk and helping to improve your governance. This focus on your best interests provides you with greater investment scale and that scale can mean more and better opportunities for your portfolio. On top of that, you can get access to top-tier research, reporting, implementation, and advice, and all this comes with a lower price tag by harnessing our significant scale. You can focus on your organization's goals while we focus on your portfolio.

How confident are you that your portfolio is moving as fast as the markets move? With the world-class OCIO provider, your portfolio benefits from active management and the ability to take advantage when markets present opportunities instead of waiting for quarterly updates. Our experts use sophisticated tools to constantly monitor your portfolio positioning every day around the clock; with more detailed knowledge of your holdings and risk exposures, we have the ability to dynamically adjust exposures in real-time, specifically for your organization. We ensure that your portfolio is updated optimized and nimble. Do your current investing resources match up with your total investment needs? It's not enough to build the right plan. You have to execute it as well. Risk needs to be managed every day. Our ocio team gives you access to the platform you would design and the team you would hire to execute your investment plan internally. If that was all you did because it is all that we do, your needs are what matter, so we'll work with you to create a holistic investment solution specifically aligned to your goals.

Combining an experienced team with our deep research capabilities, we're able to analyze and rate thousands of investment managers and opportunities across both private and public markets to assemble the best specialized options for your portfolio and organization, and we fine-tune our approach all day long, every day for you. Is it possible to get better performance, lower risk, and do so with lower costs using our open architecture solution? The right OCIO provider should help you expand your investment opportunities in private and public markets, improve your portfolio alignment for issues like ESG, and give you access to powerful tools like overlays and transition management, all for a more competitive rate than it would cost to do it on your own. It makes sense in this business. Scale matters, that means we can help negotiate for lower overall costs across managers and pool your assets with other organizations.

At Russell Investments, OCIO is what we do; not a side business. Your focus should be on your organizational mission. Our focus will always be on your best interests.

How can CIO outsourcing help?

Deepen your resources.

Outsourcing your investments will add depth and continuity, allowing you to focus on the decisions most critical to your organization.

About risk management

Respond more rapidly in a crisis.

Partnering with an OCIO firm ensures your portfolio is monitored around the clock and can respond rapidly in a crisis.

Lower your investment costs.

An OCIO provider can use their scale leveraging in-house capabilities at cost and negotiating more competitive sub-manager rates.

Learn about OCIO fees

OCIOs improve access to the best ideas

Improvement alignment: The sustainable roadmap

Whether you're driven by personal or stakeholder values, mitigating risk or complying with regulation, sustainable factors are a key consideration for many investors. Yet, as with many areas of investing, it's complicated. An investment outsourcing partner can help.

See our roadmap

Private Markets: Leveraging its power

The private markets category can be a powerful investment tool for overcoming low returns. However, it demands greater risk management and potentially large capital requirements, challenges an outsourcing partner can help you address.

Private capital markets

Enhanced implementation capabilities: Execution is key

A skilled outsourced investment management provider will be able to incorporate critical risk management functions, such as overlays and transition management internally, providing you with a single point of accountability.

What to look for in an OCIO

FIDUCIARY GUIDEBOOKS

Tailored for DB, DC, healthcare, and non-profit, we step through the key elements of an optimal investment program.

Explore our collection

WE CAN HELP

If you're considering an outsourced CIO model, we can help you find the right approach for you.

Request a call back

OCIO myth-busting

"I'll lose control of my investment program"

The reality is far removed. Each outsourcing partnership is based on the unique resourcing needs of the organization. Fiduciary responsibility cannot be delegated; however, we can help you determine the right level of resourcing for your organization. The ultimate authority remains with you.

Who does what?

"Outsourcing hides fee layering"

Fee standardization remains an elusive goal for the industry, and hidden or additional fees can be an issue for some providers. The industry best practice remains full fee transparency, particularly around the remuneration to third parties, with a simple "all-in" or "cost-plus" fee based on the scale of assets managed.

Fee transparency

"Strategies are over-diversified"

Portfolios can be over-diversified with additional inclusions reducing return potential without reducing risk. Best practice providers will have the tools to accurately assess a broad array of opportunities for diversification and align them with the investors' unique risk appetite.

Considering an outsourced investment approach

What to look for in a provider.

KEY ASPECT 1

Integrated, holistic risk management

Accurate, timely and comprehensive visibility of risks at the total portfolio level forms the foundation for virtually all basic risk and portfolio management activities. Yet, with the complexity embedded in today’s portfolios, across public and private assets, integrated holistic visibility is surprising uncommon.

KEY ASPECT 2

Organizational focus and capability

Maintaining the full suite of capabilities required for any outsourcing solution requires significant commitment, scale and resources. Organizations with competing priorities, little leadership focus or lacking fully integrated capabilities will find it challenging to sustain a competitive edge.

KEY ASPECT 3

Industry-specific experience

A partner lacking a well-grounded understanding of your industry will ultimately draw on your time to get up to speed (at your expense). In contrast, a partner who is an industry specialist will be able to provide additional insight, and support, based on their experience guiding organizations with similar challenges.

KEY ASPECT 4

The human element

Although exceedingly difficult to quantify, the relationship between your organization and your outsourcing provider is of critical importance. The best partners will act as a seamless extension of your team, with aligned objectives and a cohesive approach.

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Outsourced CIO

The Right OCIO Can Cure Insomnia in Restless Markets

Even in normal times, managing an investment program is a challenging job. But when you add on tariffs and trade wars, it's bound to lead to some sleepless nights. Learn how an OCIO firm can provide relief.

Read the article

Supporting materials

Outsourcing Guide

Tools and practical advice to help determine the right investment outsourcing model for your organization.

Get the guidebook

RFP BUILDER

Our Request for Proposal Builder helps to ensure you ask the right questions when searching for the ideal partner.

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