This analysis is based on the results of a Greenwich Associates study, sponsored
by BNY Mellon. Between February and March 2018, Greenwich Associates
interviewed 33 OCIO providers about their businesses, biggest challenges and
support service providers.
Markets have become increasingly complex, intensifying the challenges facing institutional investors of all sizes. As a result, larger institutions have begun to outsource, or at least investigate the pros and cons of the OCIO model. The ranks of OCIO clients now include several funds with more than $10 billion in plan assets.
OCIO providers face major challenges — although OCIOs strive to provide comprehensive, end-to-end services, the reality is that 9 out of 10 firms work with multiple service providers. Trying to integrate these providers in-house offers some big challenges:
When it comes to selecting an OCIO provider, institutions lean heavily on the reputations of the firms competing for their business.
67% of respondents say potential clients ask about third-party support services, administrative functions and the names and reputations of custodian and/or administrative partners.
40% of study participants believe the technology platform will be an integral factor in institutions’ choice of an OCIO provider.
“The best-in-class service providers are the ones who can anticipate the unique challenges of OCIO providers and tailor their solutions, particularly in the areas of data aggregation, reporting and management.”
Bob Dollard, Public Funds Segment Manager, BNY Mellon Asset Servicing