Large OCIO deals highlight third-quarter hiring activity

Search activity for the third quarter of 2022 decreased 0.9% from the prior quarter. The number of defined contribution searches decreased to two from 13 for the quarter. The number of service provider searches increased by 20% to 66, with 36 out of 66 searches for consultants and sixteen for record keepers. The traditional manager searches increased by 4%, and the number of fixed-income searches decreased to four from seven in the prior quarter.

Boston Retirement System launched four alternative RFPs seeking commitments to real estate, real assets and private equity funds. CalPERS and Connecticut Retirement Plans & Trust Funds also launched four investment consultant searches, followed by three from Employees’ Retirement System of the State of Hawaii.

Notable activity for the quarter included ACCESS’ two real estate searches totaling $1.74 billion. ACCESS, A Collaboration of Central, Eastern and Southern Shires, manages $41.4 billion in pooled pension assets on behalf of 11 local UK government authorities. The global real estate fund-of-funds manager and U.K. core direct real estate manager will manage two portfolios of roughly $562 million and $1.18 billion, respectively.

Ircantec issued $1.1 billion in searches for green bond and social bond managers. Teachers’ Retirement System of the State of Illinois launched a $400 million search for active emerging market equity managers to manage broad emerging market strategies outside of China and India. The new managers would assign country-specific allocations based on conviction and fit, with each position’s sizing between $50 million and $150 million.

All information is based on transactions reported by Pensions & Investments’ global reporting staff.

Hiring activity decreased 1.2% from the previous quarter to $91.3 billion. The number of hires decreased a significant 19.8% for the quarter to 564 from 703, and decreased 19.1% from the same period a year earlier. The number of defined contribution hires dropped 62.2% from the previous quarter to 34, followed by a 25% decline for outsourced CIO and a 24.2% decline for private equity.

However, the most notable hiring activities for the quarter came from the OCIO space. OCIO hires increased by 78.6% to $40 billion from $22.4 billion in the prior quarter. BlackRock was hired as outsourced CIO by General Dynamics Corp. to manage its $14 billion in pension plan assets. Previously, British Airways tapped BlackRock as outsourced CIO for its $26 billion in assets in two plans.

British Steel Pension Scheme awarded Legal & General Investment Management a $12 billion OCIO mandate. Hartford HealthCare hired Morgan Stanley as outsouced CIO for its $4.3 billion in pension assets. Unisys hired Cardano as OCIO to manage its $1.5 billion U.K. growth and liability-hedging portfolios. Russell Investments was awarded $17.6 billion in OCIO mandates year to date, followed by $14 billion for BlackRock and $13.2 billion for Schroders.

Blackstone was awarded the most mandates in the third quarter, with 19 totaling $4.28 billion, followed by State Street Global Advisors with 17 totaling $1.62 billion, and BlackRock with 12 mandates. CalPERS committed $750 million to Blackstone Mileway Logistics. Some $1.26 billion out of State Street Global Advisors’ $1.62 billion came from a passive international equity mandate awarded by North Dakota State Investment Board.