Assets managed by U.S. outsourced chief investment officers are projected to exceed US$2.7 trillion by 2022, according to new research by Cerulli Associates.
“Institutions face many investment-related, operational and regulatory challenges and need help with the day-to-day management and oversight of their investment portfolios,” said Michele Giuditta, associate director at Cerulli Associates, in a news release. “Given the increasing pressures and time intensity required to oversee and manage a portfolio, the use of the OCIO model continues to rise.”
According to the research, the top three reasons investors seek an outsourced chief investment officer is the lack of internal resources (58 per cent), a desire to improve governance (58 per cent) and the need to improve risk-adjusted returns (31 per cent).
Among outsourced chief investment officer providers, 97 per cent cited increased industry competition as at least a moderate challenge, while half identified it as a major issue.
The research also found that 97 per cent of asset managers polled have won a mandate through an outsourced chief investment officer provider. Accordingly, nearly two-thirds (63 per cent) of asset managers anticipate outsourced business will be very important to their overall institutional sales goals in three years, up from 37 per cent that currently view it as very important.