The recent market turmoil has caused some anxiety among many institutional investors. And even though market volatility is inevitable, it’s important to feel confident in your strategy, should a recession ensue.
Partnering with the right OCIO provider helps to establish investment policies, governance and allocation tactics to ensure your overall strategy can withstand the ups and downs of the market. If a financial crisis, such as what we saw in 2008, happened again, how would your OCIO handle the downturn?
Ask these 5 critical questions to find out.
- Can you quantify downside risk in the event of market turbulence? An OCIO that invests in risk management technology to perform scenario testing of various market environments can shed light on how your portfolio would react to market changes.
- Do you have a forward-looking approach to investment management that does not rely on past performance? Market opportunities are captured by focusing on manager characteristics that drive long-term value, not by focusing on past performance.
- How fast are manager changes implemented? A multi-manager approach stacks each asset class with specialist third-party managers to create custom, diverse strategies. Additional vetted managers should be ready for inclusion, allowing for nimble manager changes.
- How long have you been providing dedicated OCIO services? Since 2011, the number of OCIO providers has more than doubled. You want your OCIO to have the experience, infrastructure and resources to help withstand difficult swings in the market.
- How does your OCIO team communicate and educate my investment committee and staff? Staying on top of the latest news and developments in a volatile market is critical. Frequent sharing of updates and education on best practices helps everyone understand, and stick to, the strategy.
When a down market hits, will your OCIO be ready?
As an OCIO provider for 25+ years, we’ve been through various market downturns. Our clients, dozens of whom have been with us for over two decades, can tell you that we have the tools, resources, technology and experience to anticipate and react to market changes.
Find out how our strategy in 2008, and over time, has impacted our institutional clients. Learn about our OCIO Program
Information provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company. Investing involves risk including possible loss of principal. There can be no assurance that your investment objectives will be achieved.