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OCIO / Fiduciary Management / Delegated Investment - the best white papers

OCIO / Fiduciary Management / Implemented Investment

Outsourced CIO (OCIO), delegated CIO, implemented consulting, fiduciary management, OCIO, delegated investment management….rarely has a single investment concept been known by so many different names. It's no wonder that trustees are confused, when so many different terms are all used to describe what is fundamentally the same service.

For a DB pension plan, these terms refer to an arrangement whereby the plan sponsor sets out the high-level objectives, defining the long-term funding aims and acceptable parameters for the return from the fund's assets relative to its liabilities. The delegated investment manager will then exercise discretion in implementing a strategy to meet those aspirations, including asset allocation, stock selection, portfolio management and investment operations.

The landscape for such services has evolved considerably in the last few years, and pensions and endowment trustees have a range of factors and providers to consider. Here are some of the best papers that we've curated on the Savvy Investor site:


A Guide to Delegated Investment Management (Willis Towers Watson, 2016)
This detailed document from Willis Towers Watson provides plan sponsors with valuable insights into delegation. As a consequence of delegation, plan sponsors have access to relevant skills that are lacking. They also can devote more time to oversight and strategy issues.

UK Fiduciary Management Survey Report (AON Hewitt)
This Fiduciary Management Survey by Aon Hewitt provides a comprehensive and authoritative overview of the current fiduciary management of DB pensions landscape.

North America: Choosing Delegated Investment Management Services for Pensions
This paper, from the Terry Group, explains that an investment strategy has a much greater chance of being implemented if the investment decision-making is delegated. Outsourcing investment strategy decisions is worth considering regardless of the length of time a respective pension fund will be around for. For an outsourcing strategy to reap the right results, it'll first be important to grasp the reason and ultimate aim of the process. Only then should you begin a detailed and thoughtful process of vetting potential providers. Remember that a plan sponsor cannot dispose of its fiduciary duty completely. Selecting and monitoring an OCIO are both very important jobs.

Meeting Today's Challenges with Outsourced Investment Solutions (PNC)
The challenges confronting institutional asset owners, from an increasingly complex regulatory environment to soaring market volatility, have never been greater.  New ways to control risk and keep costs down, whilst achieving investment objectives, are being pursued by many investors, including foundations, pension plans and endowments.

Trends in the Outsourced Chief Investment Officer Market (IMCA, 2016)
This paper by IMCA explains what the delegated CIO concept is. The author, Travis Pruit, CFA, provides insights into the history of the concept and explores some possible future trends.

OCIO: The right choice for your organization? (Vanguard)
There are various reasons why pension management is challenging, including the changing investment terrain, different investment approaches, and the fiduciary responsibilities of the plan sponsor in plan management. These complexities, among others, have caused some to pass on responsibility of these tasks to an OCIO with specialized knowledge of pension-specific challenges. In a recent survey, 69% of OCIOs dedicated to pensions have reported that their clients engaged them due to insufficient internet resources - the personnel needed to respond adequately to the speed and complexity of financial markets.

Outsourcing considerations for pensions (Russell Investments)
According to Michael Thomas and Brian Golob, the emergence and growth of outsourced CIOs (OCIOs) in pension investment management has been one of the most notable industry trends of recent times. A recent survey by Pensions & Investments shows that there were 71 OCIO providers in 2014 (compared to only 32 in 2011) managing over $1 trillion in assets on both partially and fully discretionary bases. Issues of fiduciary duty, role, and evaluation have since come to light, and Russell’s views in each of these areas are highlighted with a "who does what” worksheet and sample interview/RFP questions to help plan sponsor considerations.

OCIO RFPs: Are You Asking These Key Questions? (Strategic Investment Group)
It has been increasingly common for organizations needing an OCIO to use traditional RFPs to indentify candidates, and thus the CIO role is being increasingly outsourced. Consultants aiding in OCIO selection have fostered this trend to institutionalize the process of searching. However, even though RFPs can be helpful in the evaluation of potential outsourcing partners, they often either leave key questions unasked or fail to solicit critical information effectively. Additional lines of inquiry ought to be added to the RFP so asset owners can better evaluate OCIOs.

Investment Outsourcing: Evolution of the Industry, Products and Solutions (NEPC)
This paper by NEPC examines the progress and change that has taken place in the investment outsourcing industry.

U.S. DC Pension Plans: What to outsource? (Russell Investments)
In all DC plans, some functions are delegated to outside service providers. Before undertaking a formal program of outsourcing fiduciary responsibility, a sponsor will want to engage in an explicit decision-making process to determine which functions to outsource and which to retain control over. This paper explores more.

Trends in the Outsourced Chief Investment Officer Market (IMCA, 2016)
This paper by IMCA explains what the delegated CIO concept is. The author, Travis Pruit, CFA, provides insights into the history of the concept and explores some possible future trends.

When you visit Savvy Investor, you'll see why the site has become an instant hit with investment consultants, pension funds, CIOs, asset managers and other investors.