Not long ago, the definition and scope of an outsourced CIO was narrowly defined. It generally meant investment management — a traditional consulting model in which the process of interviewing managers was delegated to an outside provider.
Over time, however, as institutions' internal staffs have been reduced and stretched, the definition has expanded and evolved in kind. While OCIO was once regarded as merely an investment advisory function, it now can be about a total partnership that delves into deeper issues than an institution's investment portfolio.
Today, few successful OCIO relationships are based on the concept of a “holistic OCIO.” Simply put, value-added OCIO providers must no longer view an institution through a purely investment-related, or even finance-related, keyhole. Many institutions require a broader and deeper approach — one that addresses wide-ranging institutional factors that extend well beyond investment management.
In many respects, a holistic OCIO relationship is an investment partnership that one would expect to have within one's own internal offices. The OCIO becomes an extension of the investment office, including:
- answering any and all questions regarding investment management;
- assisting in any required education to the board and/or investment committee;
- taking accountability for investment performance, ongoing oversight and risk management; and
- working with other committees (e.g., finance, development), as well as senior staff, to ensure all the needs of the institution are understood
Finding an OCIO that can view your institution from a holistic perspective isn't easy. Here are six key queries to pose to OCIO candidates to determine whether you've found one that places a priority on managing the total portfolio.