In this issue
- Our 2017 OCIO List: Outsourced AUM up over 21%
- Harvard lags in early-innings endowment returns
- President needed for West Coast asset manager
- A short guide to OCIO happiness
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Outsourced assets under management up over 21 percent year-over-year in Skorina’s latest OCIO list!
With 76 firms heard from, we’re now reporting $1.7 Trillion in full-discretion assets under management by outsourced chief investment officer firms.
That’s a year-over-year jump of $364 billion – or a little over twenty one percent – since September, 2016!
See last year’s report, here: https://www.charlesskorina.com/?p=3916
The number of reported RFPs is also rising as institutions seek better returns and broader investment options. OCIO providers, in turn, are beefing up their resources to meet the needs of current and prospective clients.
For example: Alan Biller, Hirtle Callaghan, Goldman Sachs, and Cambridge Associates, among others, all continue to add headcount and expand capabilities.
Hirtle Callaghan is hiring senior client-centric investment professionals, Goldman and Cambridge continue to mobilize and deploy their deep internal resources, and Alan Biller continues to build for the future and consolidate their commanding position in the multi-employer pension space.
Where are CIOs to come from?
As a search-committee chairman remarked to me recently, there are very few Joe Montanas to be had among nonprofit CIOs. The accomplished stars and no-brainer candidates are mostly immovable.
That’s obviously true among the mega-endowments. Seth Alexander, Andrew Golden, and Scott Malpass are happy where they are. Recent hires like Narv Narvekar and Britt Harris were well-known to Harvard and UTIMCO, respectively, for years. And in each case that is probably the only move either would have considered.
But much the same problem exists at smaller funds. Proven leaders are already well-paid; and/or they’re closer to the end than the beginning of their careers.
Paula Volent, for instance, has done a stellar job at the $1.3 billion AUM Bowdoin College endowment, and is still relatively young. But her board is – wisely – taking very good care of her. It’s unlikely that another fund that size could match what’s she’s making.
See: https://bowdoinorient.com/2017/09/15/volents-pay-jumps-930k/
Talent is still available at a reasonable price, lots of it. But you have to look deeper and harder, and may need to move down to next-generation leaders who don’t have the long track-records that reassure nervous, picky boards. Next-gen candidates bring less hands-on experience and must survive harder scrutiny.
Big Fortune 500 firms like GE spend years and millions of dollars training their leaders for top jobs. Nonprofits don’t have the time or budget for that.
New CIOs must show up full-fledged ready to hit the ground running.
OCIO firms can offer the proven performance of those unobtainable super-stars at a reasonable price. And they can replicate the entire investment office with the process and structure to cope with the complexity of modern portfolios and mounting operational and regulatory burdens.
An OCIO isn’t necessarily the best choice for your institution, but it’s an attractive proposition for many. That’s why their AUM is still growing at that blistering pace.
Stay tuned for Part 2:
In our next newsletter, we will have more to say about the pros and cons of outsourcing, plus an extended analysis of endowment investment management costs, and conversations with some prominent outsourcing leaders.
For now, let’s just look at how the sector is doing and who’s available to take your call per our latest research.
On to the 2017 edition of Skorina’s Ultimate Outsourcer List!
Skorina’s OCIO list 76 firms
September 2017 edition
(most firms as of 6-30-17)
Agility (Perella Weinberg) Chris Bittman, CIO |
Denver, CO (303) 813-7910 |
$8bn (5-31-17) |
Alan Biller and Associates Alan D. Biller, CEO & Sr Consultant |
Menlo Park, CA (650) 328-7283 |
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Angeles Investment Advisors Leslie B. Kautz, Principal Tatijana S. Janko, Director |
Santa Monica, CA (310) 393-6300 (310) 463-7964 |
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AON Hewitt Steve Cummings, President |
Chicago, IL (847) 442-0064 |
$104bn discretionary (3-31-17) |
Appomattox Advisory Drianne Benner, MD Institutional Marketing |
New York, NY (212) 546-6247 |
$1.5bn discretionary (5-31-17) |
Aptitude Investment Management (ex Federal Way) Jeff Klein, CEO & Deputy CIO Michael Hillman, Head of IR |
Seattle, WA (206) 788-8808 |
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Artemis Wealth Advisors Peter M. Rup, Founder & CIO |
New York, NY (212) 838-9000 |
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Arthur J. Gallagher & Co. Michael W. Johnson, Area President Institutional Investment & Fiduciary Services |
Washington, DC (202) 898-2270 |
$53.6bn advisory, $2.6bn discretionary (6-30-17) michael_w_johnson@ajg.com |
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Athena Capital Advisors Lisette Cooper, MP/CIO |
Lincoln, MA (781) 274-9300 |
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Balentine M. Rob Ragsdale, Partner |
Atlanta, GA (404) 537-4800 |
$2.6bn (6-30-17) |
BlackRock Edward Ng, MD, Head of US OCIO/LDI/Portfolio Mgmt |
New York, NY (212) 810-5300 |
$122bn discretionary (6/30/17) |
BNY Mellon Investment Management Andrew D. Wozniak, Head of Fiduciary Management |
New York, NY (412) 236-7940 |
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Callan Associates Jim Callahan, Executive VP |
San Francisco, CA (415) 974-5060 |
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Cambridge Associates Deirdre Nectow, Mgn Director |
Boston, MA (617) 457-1781 |
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Canterbury Consulting Poorvi Parekh, Director of Outsourced Investments |
Newport Beach, CA (949) 718-2224 |
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Clearbrook Global Advisors Elliott Wislar, CEO Gregg Sibert, Chief Mrktg Officer |
New York, NY (212) 683-6686 |
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Commonfund Tim Yates, Mgn Dir, Head Strategic Solutions |
Wilton, CT (203) 563 -5254 |
$24bn discretionary (6-30-17) |
CornerStone Partners David Russell, Sr Mgn Dir |
Charlottesville, VA (434) 295-3947 |
$10bn (6-30-17) |
Covariance Capital Management (TIAA-CREF) Cara Howe, Sr Dir bus dev Chris Carabell, MD, head of bus dev |
Houston, TX (713) 770-2042
(713) 770-2072 |
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DiMeo Schneider & Assoc. Robert (Bob) A. DiMeo, MD & Co-Founder Jon Fellows, Partner & Chair, Discretionary Committee |
Chicago, IL (312) 853-1000 |
$67.6bn advisory, $2.8bn discretionary (5-31-17) |
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Disciplina Matthew W. Wright, President & CIO |
Nashville, TN (615) 490-6007 |
AUM not available |
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Discretionary Management Services (DeMarche Assoc.) Thomas C. Woolwine, President |
Overland Park, KS (913) 981-1345 |
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Edgehill Endowment Partners Ellen Shuman, Mgn Partner Nina F. Scherago, Mgn Partner |
New Haven, CT (203) 654-3552 (203) 654-3551 |
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Fidelity Institutional Asset Management (ex Pyramis) Jim Zadrozny, SVP institutional sales |
Smithfield, RI (401) 292-4760 401-209-0523 cell |
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Fund Evaluation Group Christina Drake, Sr Client Development Associate |
Cincinnati, OH (513) 592-2107 |
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Gerber Taylor Matthew Kinnear, Client dev |
Memphis, TN (901) 526-9750 |
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Glenmede |
Philadelphia, PA (215) 419-6640 |
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Global Endowment Mgmt Stephanie Lynch, Partner |
Charlotte, NC (704) 333-8282 |
$8.4bn (6/30/17) |
Goldman Sachs Kane Brenan, Mgn Director |
New York, NY (212) 855-9851 |
$126.4bn discretionary (6/30/17) |
Hall Capital Partners Sarah Stein, Managing Partner Alison Bowe Diessner, Principal |
San Francisco, CA (415) 277-2634 (415) 217-2494 |
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Highland Associates Kelly Campbell, Mrktg Assoc |
Birmingham, AL (205) 939-8307 |
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HighVista Andre Perold, CIO |
Boston, MA (617) 406-6510 |
$3.1bn discretionary (6-30-17) |
Hirtle Callaghan Erica Evans, Head of Client Engagement |
W. Conshohocken, PA (610) 943-4100 |
$23bn (6-30-17) |
Investment Performance Services David A. Russell, Sr Investment Strategist |
Newtown, PA Savannah, GA (215) 867-2330 |
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Investure Ellen Meyer, Client Team Dir |
Charlottesville, VA (434) 220-0280 |
$13.5bn discretionary (7-31-17) |
J.P. Morgan Asset & Wealth Management Monica Issar, Head Endowments & Foundations Group |
New York, NY (212) 464-2852 |
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Lowe, Brockenbrough & Co. (Bespoke Strategies) Christopher Dion, MD & CIO |
Richmond, VA (804) 287-2744 |
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Makena Bill Miller, Partner & COO |
Menlo Park, CA (650) 926-0510 |
$19bn (6-30-17) |
Mangham Associates Elizabeth Aycock, Director |
Charlottesville, VA (434) 973-2223 |
$1.5bn discretionary (6-30-17) |
Marquette Associates Doug Oest, Mgn Partner |
Chicago, IL (312) 527-5500 |
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Meketa Fiduciary Mgmt Chaunice Peebles, Relationship Manager |
San Diego, CA (760) 795-3455 |
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Mercer Rich Joseph, US delegated solutions leader |
Boston, MA (617) 747-9540 |
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Mill Creek Capital Advisors Josh Gross, President |
Conshohocken, PA (610) 941-7714 |
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Morgan Creek Capital Mgmt Mark Yusko, CEO & CIO |
Chapel Hill, NC (919) 933-4004 |
$2.3bn discretionary (6-30-17) |
Morgan Stanley/Graystone Robert Mandel, Exec Dir Suzanne Lindquist, Exec Dir |
New York, NY (914) 225-5420 (212) 296-1064 |
$23.2bn OCIO discretionary (6-30-17) |
NEPC Steve F. Charlton, Director consulting services |
Boston, MA (617) 374-1300 |
$15.3bn discretionary (6-30-17) |
New Providence Asset Mgmt Lance Odden, Mgn Director |
New York, NY (646) 292-1200 |
$3bn discretionary (6-30-17) |
Northern Trust Margret Duvall, Sr Solutions Strategist |
Chicago, IL (312) 444-7336 |
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Partners Capital Paul Dimitruk, Chair, Partner Brendan Corcoran, Partner |
Boston, MA & UK (617) 292-2575 (617) 330-7679 |
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Pavilion Advisory Group Inc. /U.S. operations (bought Slocum) Deanna Allen, VP Mrktg |
Chicago, IL (312) 798-3200 Minneapolis, MN (612) 338-7020 |
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Pentegra Investors Inc. Sarah Coxe Lange, MD, Institutional Client Solutions |
White Plains, NY (914) 821-9563 |
$11bn total discretionary (6-30-17) |
Permanens Capital Gary Yannazzo, CFO |
New York, NY (212) 993-7440 |
$2.6bn discretionary (6-30-17) |
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PFM Asset Mgmt John Spagnola, Mgn Dir |
Philadelphia, PA (215) 567-6100 |
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PNC Bank Deborah A. Kolsovsky, EVP & MD Institutional Advisory Solutions |
Scranton, PA (570) 961-6868 |
$22bn discretionary AUM (6-30-17) |
Regions Asset Mgmt S. Alan McKnight, Jr., CIO |
Birmingham, AL (205) 264-6621 |
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Rocaton Investment Advisors John Hartman, Mgn Director |
Norwalk, CT (203) 621-1717 |
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Rockefeller & Co. Patricia Verrochi, Mgn Dir |
New York, NY (212) 549-5314 |
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Roundtable Investment Partners (merged with Post Rock) Geoffrey T. Boisi, Chairman & CEO |
New York, NY (212) 488-4700 |
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Russell Investments Eric Macy, Mgn Dir |
New York, NY (212) 702-7941 |
$2.3 trillion advisory (12-31-16) $123.7bn OCIO global institutional (3/31/17) $48.6bn OCIO US institutional (3/31/17) |
Segal Marco Advisors Ryan M. Hanna, SVP, Head Global Portfolio Solutions |
Chicago, IL (312) 612-8469 |
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SEI Institutional Group Michael Cagnina, VP, MD |
Oaks, PA (610) 676-1496 |
$88.5bn discretionary (6/30/17) |
Seven Bridges Advisors M. Ram Lee, Partner |
New York, NY (212) 490-6320 |
$4.25bn total (6-30-17) |
Spider Management Co. Rob Blandford, President, CIO |
Richmond, VA (804) 289-6010 |
$4.3bn discretionary (6-30-17) |
Spruceview Capital Partners John A. Garibaldi, Mgn Partner |
New York, NY (212) 485-8617 |
AUM not available |
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State Street Global Advisors Keith Malcher, MD, Investment Solutions Group – OCIO |
Stamford, CT (203) 708-2501 |
$83.9bn discretionary (6/30/17) |
Strategic Investment Group Nikki Kraus, MD, Client dev |
Arlington, VA (703) 243-4433 |
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Summit Solutions (Summit Strategies Group) Don Wehrmann, Principal |
Saint Louis, MO (314) 727-7211 |
$3.3bn OCIO assets (5-31-17) |
SunTrust Bank Elizabeth Cabell Jennings, SVP, Dir Institutional Investments Foundations, Endowments Specialty Practice |
Atlanta, GA (404) 813-1538 Richmond, VA (804) 782-7016 |
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The Investment Fund for Foundations (TIFF) Pat Torrey, Mgn Director |
Radnor, PA (610) 684-8201 |
$9.2bn discretionary (6/30/17) |
UBS AG Charles Service, MD, Investment Solutions |
Chicago, IL (312) 525-7016 |
$13bn OCIO mandates (6-30-17) |
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US Trust Bank of America Bernard Reidy, National Philanthropic Sales Executive |
New York, NY (646) 855-5647 |
$30.9bn discretionary (6-30-17) |
Vanguard Kevin T. Jestice, Principal |
Malvern, PA (610) 669-6449 |
$36bn discretionary (5-31-17) |
Verger Capital Management Patrick Decker, Client Development, MD Wesley Carroccio, Client Development, Director |
Winston-Salem, NC (336) 758-4129 |
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Verus Investments |
Seattle, WA (206) 622-3700 |
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Wells Fargo – Institutional Asset Advisors Rob Kent, VP national sales dir |
Overland Park, KS (913) 234-2929 |
$23.5bn discretionary (3/31/17) |
Willis Towers Watson Kemp Ross, Global Head of Delegated Debra Woida, Head, Delegated Investment Services, Americas Pieter Steyn, EMEA head Delegated Investment Services |
Chicago, IL (312) 525-2436 (312) 525-2336
44 (0) 207 170 2714 |
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Wilshire Associates Kristofer T. Kelleher, Managing Director |
Pittsburgh, PA (412) 434-1602 |
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Northern California asset manager is looking for a President/Entrepreneur
We’re looking for a leader who combines entrepreneurial flair with outstanding investment-management skills.
He or she must be an accomplished strategist/portfolio manager across all asset classes. Ideally, we also want to see some hands-on experience as a business founder, owner, or partner.
The firm provides fiduciary consulting and full-discretion outsourced Chief Investment Officer services (OCIO) to large employee benefit plans, manages close to $40 billion under full discretion, and advises on an additional $50 billion in client relationships.
The firm has maintained steady growth for over thirty years, employs thirty-five professionals and staff, and has achieved eminence in its field.
This position offers an opportunity to build a substantial equity position and comes with a very competitive compensation and benefits package.
Call: Charles Skorina, 415-391-3431
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A short guide to OCIO happiness
If you are a board-member or senior exec, you should have good answers to at least two questions before you cold-call any of those numbers.
First: Why are you thinking of outsourcing?
Return-envy? Peer funds seem to be doing better than you are? Sure, returns aren’t everything, especially in the short term; and especially without taking risk-return balance into account. But you’re tired of explaining that to your stakeholders and that nasty reporter who keeps writing bad things about you. A high-performing OCIO might get you better returns.
And that would make your life easier.
Meeting-fatigue? You’re a smallish fund and you use a committee-and-consultant model. But the work-load on your volunteer members keeps ratcheting up. And your selfless investment-committee chair is retiring. And nobody else wants the job, especially not you. And setting up an internal investment office is not cost-effective.
Boards, you recall, are supposed to set policy, not manage. An OCIO is an actual manager.
An OCIO could manage, while your people set policy.
Again, your life gets easier.
Second: What is an easier life worth to you?
Good OCIOs (like good CIOs) are not cheap. If you prioritize cheap, then you shouldn’t be thinking in terms of active investment management. Call Vanguard and get a menu of index funds for a simple, diversified portfolio. You can buy all the beta you want for very little. That works for some people, but probably not for you and your stakeholders or you wouldn’t be reading this list.
You probably know what your consultant and external managers are charging you in terms of basis-points-per-AUM dollar to manage your money. But if an OCIO can get you an easier life, then what premium will you be willing to pay over that?
When and if you’re ready to issue RFPs and interview firms, then it will be time to warm up the lawyers and accountants and do full-tilt due-diligence. There are pre-fab checklists out there with many, many boxes to tick. But that, conveniently, is beyond the scope of this letter.
Good luck. And tell them Skorina sent you.
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A very early look at some FY17 endowment returns:
writes-offs drag Harvard down
As we go to press we have 1-year returns for 10 major endowments, with Harvard reporting on Tuesday, 19 September. HMC is 10th out of 10 thus far.
Rank |
Rtn |
AUM $bn |
Endowment |
Chief Investment Officer |
– |
– |
– |
– |
– |
1 |
18.8 |
$1.80 |
Grinnell College |
Wilson, Scott |
2 |
15.1 |
$10.80 |
U California Regents |
Bachher, Jagdeep |
3 |
15.0 |
$1.20 |
U of Colorado |
Bittman/PWP |
4 |
14.6 |
$4.96 |
Dartmouth College |
(Peedin, Pamela) Ruth, Alice |
5 |
14.3 |
$14.80 |
MIT |
Alexander, Seth |
6 |
13.4 |
$28.80 |
U of Texas/UTIMCO |
(Zimmerman, Bruce) Harris, Britt |
7 |
12.4 |
$8.60 |
U of Virginia/UVIMCO |
Kochard, Lawrence |
8 |
12.1 |
$3.00 |
U of No Carolina – Chapel Hill |
King, Jonathon |
9 |
10.3 |
$0.98 |
U of Iowa Fdn |
Bethea, Jim |
10 |
8.1 |
$37.10 |
Harvard U |
Narvekar, Narv |
Scott Wilson at Grinnell College leads the pack. We took a close look at him in last week’s letter, here: https://www.charlesskorina.com/?p=5094
Our friend Brandon Dixon at the Crimson has the skinny on Harvard here:
http://www.thecrimson.com/article/2017/9/20/hmc-2017-results/
And see Michael McDonald at Bloomberg:
In a letter to the Harvard community Mr. Narvekar says forthrightly:
“Our performance is disappointing…”
He sets out the changes he’s making (at a brisk pace). He attributes most of the bad news to write offs in several asset classes. But promises no miracles.
“I expect it will take a number of years to re-position HMC in order to perform up to our expectations…”
We’ll have more commentary in due course as more returns are announced.
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The Skorina Letter
Each issue explores how the world’s most accomplished asset managers think and invest. Original content includes profiles and interviews with industry veterans and research on compensation and investment performance.
Our insights and commentary come from our clients – board members, CEOs, chief investment officers – and the global investment community within which we work as executive search professionals.
Institutional investors operate at the crossroads of capital, talent, and ideas, shepherding over seventy trillion dollars in global assets. It’s a constantly evolving spectacle and The Skorina Letter gives readers a ringside seat.
Prior issues can be found in “archives” on our website,
