However beautiful the strategy, you should occasionally look at the resultsNo attribution

As luck would have it, we’re currently managing an OCIO (outsourced chief investment officer) search for a notable east coast organization and thought we’d share some of what we’ve learned over the years.  A few tips for our board and family readers.  Why this “noblesse oblige?”  If you believe the pundits, investment advisors are about to enter a new golden age of wealth management.

According to UBS and a flurry of broadsheets, “over the next 20 years, the world will experience the greatest transfer of wealth in history with $84 trillion expected to pass down to younger generations in the US alone.”

At the celestial end of the wealth spectrum, we find a little over half the world’s wealthiest living in the United States.  UBS counts 123,870 ultra-high-net-worth individuals with investable assets of $50 million or more on our shores, and the bank expects that number to top 180,00 in five years.

Add in another 3,300 foundations with assets over $50 million and no wonder both Cerulli Associates and Capgemini forecast voracious demand for OCIO services for years to come.

But with over one hundred firms on our latest OCIO provider list, how’s a family or institution to choose among discretionary investment managers?

Managing money ain’t cheap

As we wrote a few weeks ago in our OCIO summer update, it’s expensive to support an institutional grade full-service asset management platform.  Costs are climbing for infrastructure, cyber-security, audits, and compliance.

Boston Consulting Group, in their Global Asset Management 2023 review, estimates that – due to rising costs – the industry’s compound annual growth rate in profits “will be approximately half the average of recent years (5% versus 10%).”

In a related wealth report, BCG highlights the impact rising costs are having on smaller investment managers, those with less than $150 billion AUM (i.e., family offices and OCIO’s, among others.)

Most nonprofits and families (basically anyone under $500 million in investable assets) just don’t have the time or resources to build competitive and secure internal investment capabilities.  Hence the spiraling demand for professional full-service OCIO providers.

So, where to begin?

Your new best friends

Our advice?  Start your search by answering the following question.  How will you measure success?  Absolute return?  Capital appreciation?  A new admin building with your name on it?

Before you pick through our handy OCIO directory and cogitate on the entries, please write down what you would like your new investment partner to accomplish.  Best to set expectations before they are set for you.

Here’s something else to keep in mind.  “Lack of adequate communication – particularly regarding performance – is the single biggest challenge and the most common source of dissatisfaction within OCIO relationships.” FundFire.

When we speak with family heads and board members who are considering a change in OCIO providers they usually cite performance.  But as Chestnut Advisory explained in a recent study on industry growth, “there is relatively little difference among the long-term investment performance track records of most OCIOs.”

So what’s this discord really about?  Dig deeper and we find it’s usually not about returns at all, but about a change in their client service rep, and they just don’t like the new person.

Mr. Stuart Lucas, program director for the wealth management program at the University of Chicago Booth School of Business, former investment committee chairman at National Public Radio, and senior investment officer for his own family’s office spoke with us a few years ago about consultant relationships.

The first investment committee I joined hired a well-respected consulting firm.  Unfortunately, our initial advisor was not a good listener and felt compelled to win debates with the committee.

We fixed the problem by changing the advisor, not the firm.  Now, each time I am involved in a consultant search I insist on interviewing several teams within the firm.  This improves the chances for a good long-term fit.

Size matters

Our latest OCIO directory includes one hundred two firms.  It’s a crowded field, so we’ve broken it down into seven groups by AUM:

• 10 over $100bn
• 10 between $50bn – $100bn
• 12 between $20bn – $50bn
• 17 between $10bn – $20bn
• 15 between $5bn – $10bn
• 31 between $1bn – $5bn
• 08 under $1bn

There’s a size and service model for every preference.  See our appendix below.

Lockups, redemptions, gates, and fees

Each firm has its own culture, investment style, and biases.  Some firms focus on indexing and liquid markets, others on alternatives, still others on ESG.  Some customize portfolios, others don’t.

Alternatives such as venture capital and private equity have outperformed in the past, but all signs point to rough seas ahead.

According to a 2022 University of Chicago paper, “Venture capital performance remains remarkably persistent across funds raised by the same general partner. In contrast, buyout funds’ performance persistence becomes noticeably weaker over time.”

If it’s liquidity you want, check the fine print for lockups, redemptions, gates, and fees.  There are sharks in those private market waters.

One last point.  As BCG notes, alternative assets total maybe one fifth global AUM yet generate over half the revenue, about $190 billion in fees and carry.  Wall Street loves alternatives.

Our handy checklist

Here’s the checklist we use when reviewing OCIO firms.

•  Business structure and service models
•  Reporting, communication, education
•  Manager research and due diligence
•  Revenue and fees transparency
•  Technology and cybersecurity
•  Investment and risk process
•  Inhouse systems and tools
•  Investment philosophy
•  Client service delivery
•  Staff qualifications
•  Company culture
•  Conflicts

OCIO firms 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.

Just take some time before you choose.  A dazzling presentation is only the first step toward OCIO enlightenment.  As Jon Hirtle, executive chairman of Hirtle Callaghan, emphasizes in every interview, “serious investors care deeply about keeping their promises.”

We wholeheartedly agree.  To paraphrase a shopworn quote, it’s OK to trust, but it’s better to verify.  We look for firms that keep their promises.

(download this post as PDF)


OCIO Companies grouped by AUM – Discretionary AUM 12-31-22

Over $100bn
$344,900,000,000 – Mercer
$307,000,000,000 – BlackRock
$236,800,000,000 – Russell Investments
$207,600,000,000 – Goldman Sachs
$203,800,000,000 – SEI Institutional Group
$163,000,000,000 – Willis Towers Watson
$148,700,000,000 – AON Hewitt
$146,200,000,000 – State Street Global Advisors
$130,200,000,000 – J.P. Morgan Asset & Wealth Management
$126,000,000,000 – Captrust


$50bn – $100bn
$87,300,000,000 – Northern Trust
$72,400,000,000 – Alan Biller and Associates
$71,000,000,000 – Bank of America
$67,700,000,000 – PNC Bank
$66,700,000,000 – Morgan Stanley OCIO/Graystone Consulting
$63,700,000,000 – Cambridge Associates 
$63,000,000,000 – Cerity Partners
$59,800,000,000 – NEPC
$59,000,000,000 – Vanguard
$56,200,000,000 – Brown Brothers Harriman


$20bn – $50bn
$49,800,000,000 – Regions Asset Management
$48,000,000,000 – Partners Capital
$35,000,000,000 – Callan
$32,200,000,000 – Jasper Ridge Partners
$25,500,000,000 – Strategic Investment Group
$24,000,000,000 – Meketa Fiduciary Management
$23,100,000,000 – Principal Asset Management
$22,000,000,000 – BBR Partners
$21,400,000,000 – Wilshire Advisors
$20,900,000,000 – Silvercrest Asset Management
$20,000,000,000 – Makena
$20,000,000,000 – Hirtle Callaghan


$10bn – $20bn
$18,600,000,000 – Summit Rock Advisors
$17,000,000,000 – Fidelity Institutional Advisory Solutions
$16,900,000,000 – Fiducient Advisors
$16,900,000,000 – PFM Asset Management 
$16,100,000,000 – UBS AG
$15,400,000,000 – Hall Capital Partners 
$14,100,000,000 – Marquette Associates
$14,000,000,000 – Investure 
$14,000,000,000 – Truist Bank
$13,800,000,000 – Agility
$13,600,000,000 – Highland Associates
$11,700,000,000 – Commonfund 
$11,000,000,000 – Global Endowment Management
$10,240,000,000 – CornerStone Partners
$10,200,000,000 – Glenmede
$10,100,000,000 – FEG Investment Advisors 
$10,000,000,000 – Evoke Advisors 


$5bn – $10bn
$9,800,000,000 – Ballentine Partners
$9,500,000,000 – BNY Mellon Investor Solutions
$9,000,000,000 – Mill Creek Capital Advisors
$8,100,000,000 – Fiduciary Trust International
$8,000,000,000 – Lazard Family Office Partners
$8,000,000,000 – TIFF Investment Management
$6,650,000,000 – ICG Advisors
$6,600,000,000 – Gerber Taylor
$6,200,000,000 – Angeles Investment Advisors
$5,800,000,000 – Spider Management Company
$5,500,000,000 – Brown Advisory
$5,500,000,000 – Capricorn Investment Group
$5,500,000,000 – Seven Bridges Advisors
$5,410,000,000 – Gallagher Fiduciary Advisors
$5,170,000,000 – Natixis


$1bn – $5bn
$4,500,000,000 – F.L. Putnam Investment Management Company
$4,500,000,000 – Pacific Portfolio Consulting
$4,400,000,000 – Wespath Institutional Investments
$4,300,000,000 – Alesco Advisors
$4,200,000,000 – Permanens Capital
$4,000,000,000 – Verus Investments
$3,600,000,000 – RockCreek
$3,500,000,000 – Prime Buchholz
$3,400,000,000 – Prodigy
$3,300,000,000 – Cornerstone Advisors Asset Management
$2,400,000,000 – Canterbury Consulting
$2,400,000,000 – Verger Capital Management
$2,300,000,000 – Morgan Creek Capital Management
$2,200,000,000 – The Colony Group
$2,000,000,000 – Asset Strategy Consultants
$2,000,000,000 – Edgehill Endowment Partners
$1,900,000,000 – Disciplina
$1,700,000,000 – Clearbrook Global Advisors
$1,700,000,000 – Miller Investment Management
$1,600,000,000 – Syntrinsic Investment Counsel
$1,500,000,000 – LCG Associates
$1,500,000,000 – Brockenbrough
$1,400,000,000 – Appomattox Advisory
$1,320,000,000 – Artemis Wealth Advisors
$1,300,000,000 – Fiduciary Wealth Partners
$1,200,000,000 – Global Strategic Investment Solutions
$1,200,000,000 – Multilateral Endowment Management Company
$1,100,000,000 – Arnerich Massena
$1,100,000,000 – CornerCap Institutional
$1,100,000,000 – Crewcial Partners
$1,100,000,000 – Sellwood Consulting


Under $1bn
$750,000,000 – Acansa Investment Management
$508,000,000 – Asset Consulting Group
$500,000,000 – Blue Edge Capital
$450,000,000 – RiskBridge Advisors
$430,000,000 – Harpswell Capital Advisors
$400,000,000 – Pivotal Advisors
$375,000,000 – Holt CIO
$346,000,000 – VELA Investment Management

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