Uncertainty playbook: Five focus points for institutional investors

With the first quarter of 2025 behind us, it appears that uncertainty has become the new normal. Headlines arrive at lightning speed and business conditions shift almost daily. 

As a steward of your organization’s assets, you may find yourself fielding tough questions from a variety of stakeholders, including your investment committee.

We're an investment manager and adviser with full discretion over our large institutional client assets. We understand the pressure this environment creates. During times like these, our focus is unwavering; we aim to help clients successfully navigate these turbulent waters. By thoroughly understanding our clients’ organization, goals, and unique sensitivities, we can deliver significant value and act as a steadying force amidst market volatility.

Based on our 30+ years of experience, here are five key considerations for institutional investors during uncertain times:

1.  Revisit your strategic plan 

   Now is an opportune time to review the foundational analysis that shaped your portfolio strategy. Review the parameters and triggers originally established—particularly those concerning risk and liquidity. If these still align with your goals and risk tolerance, they can provide reassurance to both you and your committee.

2.  Enhance real-time communication 

   Strengthening the feedback loop with your OCIO (outsourced chief investment officer) or advisor is critical. Changes in your organizational environment that might affect liquidity needs or risk tolerance should be communicated promptly. Your OCIO can model potential impacts to help you make informed decisions. In an uncertain, fast-evolving landscape, your OCIO partner should communicate proactively to manage both leadership and committee member concerns, ensuring clients remain prepared to respond to unfolding events and stakeholder concerns.

3.  Leverage your provider’s expertise 

   You hired an expert partner for a reason—now is the time to maximize their value. Your OCIO or advisor brings significant resources and specialized knowledge to the table. Here are a few ways they can support you:

   • Scenario planning: By updating risk modeling, providers can simulate best-case, worst-case, and most likely outcomes, enabling you to prepare for various potential scenarios.
   • Liquidity evaluation: Liquidity is crucial in uncertain times, offering flexibility to act quickly in response to market developments. Looking at the portfolio through this lens can be important right now.
   • Rebalancing strategies: Volatile markets often lead to unintended portfolio concentrations. Flexible rebalancing strategies could minimize costs while realigning portfolios. It would be worth having that discussion to identify options.
   • Minimized trading costs: When adjustments are necessary, providers with robust operational capabilities can help reduce costs and disruptions to your organization.

4.  Identify opportunities 

   While it’s natural to adopt a defensive stance during turbulent periods, staying open to opportunities can be equally valuable. Market volatility and environmental changes may present the opportunity for tactical adjustments that could benefit your portfolio. Engage your provider in discussions to explore and evaluate these possibilities.

5. Strengthen committee dynamics 

   Managing group decision-making is particularly challenging during periods of heightened uncertainty. External pressures—such as fluctuating inflation rates, interest rate changes, regulatory shifts, and geopolitical developments—can create an urgency to act. Remind committee members to stay focused on the long-term strategy and portfolio goals of the organization and not allow personal concerns to affect judgment. Emphasize that maintaining open, transparent communication is essential to keeping everyone informed and aligned on risk management and mitigation strategies.

Finally, take a moment to pause. Avoid reacting to every headline. By addressing risks systematically and implementing thoughtful strategies, institutional investors can navigate today’s uncertainties with confidence while safeguarding their portfolios for the future.

This material is for educational purposes only and represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice.

Information provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company.