I never wanted this for you. We just ran out of time, Vito Corleone ― The Godfather
Our spring 2025 Outsourced Chief Investment Officer (OCIO) directory update features one-hundred-seven service providers with pertinent particulars on each. We include names, numbers, emails, and titles of business executives at each firm ready to take your call.
Our goal is to help families and institutions locate, review, and connect with full-service discretionary outsource investment managers. Our directory makes it easy for prospective clients to reach them. No ads, no paywall, no charge.
Time and Money
Time is a beguiling thing. “The relative progression of existence” posited Einstein. “Mostly a human affair” adds theoretical physicist John Kitching. But for the rest of us, aging is more akin to Hemingway’s famous line, “How did you go bankrupt? Two ways. Gradually, then suddenly.”
Succession, like the passage of time, is something most families and institutions are aware of, but surprisingly few do much about it.
To be fair, sometimes age and events disrupt the best laid plans. A few weeks ago, I met with a notable, highly successful founder and entrepreneur who wished to discuss recruiting a new family office head. Due to this individual’s distinctive longevity, past occupants in the position are no longer with us.
This patriarch is still sharp as a tack and busy juggling ideas and opportunities, but time is short, there’s much to do, and the odds of replacing a time-tested veteran with a like-minded newbie and bringing this fresh hire up to speed in months, not years, are growing longer by the day.
Planning ahead
In the OCIO business it takes years to establish a presence, polish services, and build a solid investment record. Few firms manage the task. Even fewer adapt, revitalize, and deliver across generations.
Recent years have seen a steady stream of outsourcing hopefuls merge with better-resourced patrons as founders age out and cash in. Recent capitulants include Hall Capital, NEPC, Agility, Truvvo, Ellwood Associates, New Providence, CornerStone, PFM, and Permit Capital.
But now and then a firm manages the transition. Hirtle Callaghan, a pioneering OCIO serving philanthropic families and mission-driven nonprofits, opened for business thirty-seven years ago and recently finished fine-tuning their plans for the next fifty years.
Jon Hirtle remains Executive Chairman and works full-time, but the firm has transitioned to a distributed leadership structure with firm-wide support to provide stability and continuity. A three-member management committee now leads the firm, buttressed by ten managing directors and thirty directors.
While controlling interest remains within the Hirtle family – two generations of family members currently in leadership positions – the firm continues to parse out equity and mentor next-gen talent.
There were a few twists and turns along the way, but clients are pleased and the future looks bright.
The sunny side
It turns out, when time flies by, we’re usually having fun. That’s according to a University of Nevada, Las Vegas report.
“We tell time in our own experience by things we do, things that happen to us,” said James Hyman, a UNLV associate professor of psychology and the study’s senior author. “When we’re still and we’re bored, time goes very slowly because we’re not doing anything or nothing is happening.
On the contrary, when a lot of events happen, each one of those activities is advancing our brains forward. And if this is how our brains objectively tell time, then the more that we do and the more that happens to us, the faster time goes.”
In other words, we can choose between a seemingly short but fruitful life, or one long boring slog. Me, I think I’ll fruitfully keep on recruiting.
― Charles Skorina
Our spring 2025 OCIO Directory
For the six months ending December 31st, 2024, total OCIO AUM hit a record $4.776 trillion dollars on about $323 billion in new business (and aum appreciation), an agreeable 7.28 percent gain. But, as usual, to the biggest go the spoils.
Largest OCIO Asset Managers
14 firms over $100bn AUM*
$616,000,000,000 – Mercer
$385,600,000,000 – Goldman Sachs
$353,000,000,000 – BlackRock
$331,000,000,000 – Russell Investments
$237,000,000,000 – CAPTRUST**
$199,600,000,000 – Morgan Stanley
$199,400,000,000 – J.P. Morgan Asset & Wealth Management***
$198,400,000,000 – SEI Institutional Group
$181,000,000,000 – AON
$176,000,000,000 – State Street Global Advisors
$167,000,000,000 – Willis Towers Watson
$132,400,000,000 – NEPC
$123,000,000,000 – Wilshire Associates
$103,400,000,000 – Bank of America
$3,402,800,000,000 – 71.24 percent of total AUM
* Complete company listings by group in appendix below
** CAPTRUST manages mostly RIA money
*** OCIO AUM within JPM endowment & foundation group
Worlds apart
As we often note, the OCIO business operates in two distinct realms, the mega-aum land of corporate pensions and a parallel universe of nonprofit institutions and family wealth.
Pension plans focus on funding levels, risk mitigation, and cost reduction, while nonprofit entities and ultra-high-net-worth families attend to wealth stewardship, lifestyle preferences, and mission-based endeavors.
About two-thirds of the nearly $4.8 trillion in OCIO assets are pension money. The largest firms with their size, resources, and appetites aggressively compete for pension money and dominate the segment, managing 71 percent of our OCIO pie, about $3.4 trillion, up from 68 percent six months ago.
The largest firms have expertise across the board, of course, and manage substantial family and nonprofits assets, but corporate pensions are so large they overwhelm the data.
Final thoughts
Taxes on endowments are going up no matter which party holds power. Ivy League universities with their high-profile endowments, stratospheric tuition, complacent administrations, and minor-league public relations – are roadkill on the highway to deficit reduction and red meat for revenue starved legislators and bureaucrats.
OCIOs, on the other hand, are taxable entities. They understand how to minimize capital gains and maximize after-tax returns, particularly those with high-net-worth clients. Now is probably a good time for nonprofits in the crosshairs to consider moving some of their investable assets to discreet, savvy OCIO outsiders.
These discretionary providers offer the proven performance of in-house investment staffs 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 burden. The OCIO option is an effective option. Think about it.
