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Institutional Investors Knowledge Center


Video: Getting to Know the OCIO Model

When institutional investors decide to hire an outsourced provider like an OCIO, they’re delegating some level of discretion. The right OCIO should complement the existing infrastructure and expertise by allowing them to focus on other strategic goals.

This brief video explains:

  • Key components of the OCIO model
  • What to look for in an outsourcing provider
  • Differentiating benefits of a multi-manager OCIO

Watch the video


An increasingly complex and challenging investment environment has motivated institutional investors to consider more comprehensive approaches for managing their assets.

As a result, asset management service providers are offering solutions to help meet these needs, leading to numerous options under various names: Outsourced CIO. Discretionary Investment Management. Delegated Consulting. 3(38) Manager. Implemented Consulting.

Investors are still challenged with understanding the specific services these providers offer and how that fits the role the organization wants to play moving forward.

Fundamentally, when choosing to hire an outsourced provider, the institutional investor is choosing to delegate some level of discretion or decision making to that provider. In most instances, that includes delegating the research of, hiring/firing and oversight of money managers in the portfolio. Depending on preferences, that delegation could be expanded.

Ultimately the level of discretion that is delegated is a key component in the decision around which firm to hire.

The primary benefit of discretionary outsourcing for most institutional investors is faster decision making and added expertise in the face of complex, volatile markets. Other benefits include improved risk management, improved strategy in seeking to meet goals, and better reporting on total assets and progress against goals.

With a large number of asset management firms offering OCIO services, what should you look for when considering a move to a more comprehensive model? A few things distinguish the proven providers:

A Highly-customized approach: In many instances, organizations want to maintain discretion for key aspects of investment management, including asset allocation. It is vital that the asset allocation is highly-customized to your goals, closely monitored and adjusted as needed, and flexible to the desired level of discretion.

Scale and resources: Scale allows for cost-effective access to best-of-breed products & managers within all asset classes. Providers with significant scale can also make important investments in research tools, risk management technology, and most importantly, talented professionals.

Ongoing oversight and transparency: A clear governance process is critical for appropriate due diligence and timely decision-making. Comprehensive reports that provide a transparent view of the entire portfolio, track progress against custom goals, and monitor levels of risk should be provided.

Established model and long-term track record: Look for a provider with an actual long-term performance track record delivering discretionary services. Does the provider have a significant percentage of its client base in discretionary management, including a number of institutional clients of similar size/attributes to your organization? Recent entrants may lack the experience, economies of scale and infrastructure to execute the model effectively in the future.

When an institutional investor chooses an OCIO approach, it should result in creating an extension of their existing infrastructure and expertise. An OCIO shifts the allocation of committee time by taking on the tactical implementation of manager research, oversight and fee evaluation, thus allowing you more time to focus on other strategic initiatives, including asset allocation and maintaining the IPS.

Choosing the right outsourcing partner can bring, increased fiduciary oversight, enhanced risk management and faster decision making to your organization.

To learn more about the outsourcing model and SEI’s solution, visit

Important Information
This presentation is provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company. The material included herein is based on the views of SIMC. Statements that are not factual in nature, including opinions, projections and estimates, assume certain economic conditions and industry developments and constitute only current opinions that are subject to change without notice. Nothing herein is intended to be a forecast of future events, or a guarantee of future results. This presentation should not be relied upon by the reader as research or investment advice (unless SIMC has otherwise separately entered into a written agreement for the provision of investment advice).

There are risks involved with investing including loss of principal. There is no assurance that the objectives of any strategy or fund will be achieved or will be successful. No investment strategy, including diversification, can protect against market risk or loss.