How Big Is OCIO Market? At Least $4.79T, per Chestnut Advisory

The global outsourced CIO world is larger than most estimates, according to management consulting firm Chestnut Advisory. The firm estimated in a recent report that OCIO providers worldwide managed $4.79 trillion in 2024,

But why is estimating total OCIO assets under management so difficult?

It’s the lack of standards, Chestnut Advisory writes: Because the industry is relatively new, it does not have industry standards as robust as other industry segments.

One of those standards defines an OCIO mandate. Some OCIO providers report different mandates and client types; some exclusively report institutional mandates; and others include private wealth mandates in their AUM. Some providers include legacy assets the firm did not allocate, while others do not, according to the report.

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“Our definition of an OCIO mandate is similar to the new definition proposed by the CFA Institute 1—an engagement [in which] the OCIO provides both strategic investment advice and investment management services in one engagement for a pool of assets,” the report stated. “This definition includes mandates for asset class sleeves, partial portfolios and full portfolios.”

Chestnut defines an OCIO mandate as an engagement in which a third party provides both strategic investment advice and investment management services for a pool of assets.

“There are many different types of mandates and clients included in the ‘OCIO AUM’ reported by providers today,” said Amanda Tepper, Chestnut Advisory’s co-managing partner, in a statement. “Our new definition of an OCIO mandate is a first step toward establishing an industry standard for OCIO AUM.”

The largest OCIO providers included in the report include Mercer, with $548 billion in outsourced assets under management, Goldman Sachs Asset Management ($392 billion), BlackRock ($367 billion), Russell Investments ($327 billion) and Captrust ($209 billion).

The firm forecasted that the OCIO market will grow to $7.3 trillion in assets under management by 2029.

Chestnut researched the 2024 AUM of 134 different OCIO firms, acknowledging “the AUM values on our list are imperfect” due to the varying standards. The report also stated it expects to include more European and Asian OCIO providers in future rankings.

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Tags: Chestnut Advisory, OCIO, outsourced chief investment officer

On Monday, major U.S. stock indices declined nearly 2% following President Donald Trump’s announcement that tariffs on Mexico, China and Canada would go into effect on Tuesday. The S&P 500 fell 1.8%, and the Nasdaq Composite fell 3.6%. Shares of tech giant Nvidia fell 8.7%, and those of Tesla fell 3%, nearly 40% off highs following the November 2024 election.

By Tuesday morning, indices continued their fall, with many erasing gains made since the post-election rally.

The U.S. imposed a 25% tariff on all imports from Mexico and Canada, with an additional 10% tariff added to an existing 10% tariff on Chinese imports. All three countries have pledged retaliatory measures.

Markets had appeared to ignore tariff threats earlier in the year. Experts said a common thought among investors was that the threats of tariffs were a negotiating tactic intended to draw concessions from other countries. When Trump first announced tariff plans following his inauguration, markets also fell, but they quickly recovered when enactment of tariffs was delayed. Further tariff announcements were met with a muted response.

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“The sell-off that we are beginning to see has room to run (to the downside) as long as the tariff threats remain more than idle talk,” said Chris Zaccarelli, CIO of Northlight Asset Management, in a statement issued Monday. “Last month’s reprieve was just a temporary break in the downward trend, because a trade war is something the market didn’t believe was possible, so as one (or many) start to unfold, the market will begin pricing in the inevitable damage that will be done to our economy.”

Some strategists have warned that the inflationary impacts of these tariffs will result in the Federal Reserve not cutting interest rates; Treasury Secretary Scott Bessent said in an interview with Fox News on Monday that the administration is “set on bringing interest rates down.”

“The market is complacent regarding tariff impact and this is likely just the beginning with tariffs on Europe and universal ones to follow suit over the coming weeks,” said Andrzej Skiba, head of U.S. fixed income at RBC Global Asset Management, in a statement. “This will be inflationary, and the Fed won’t likely be able to cut rates in this environment.”