The Brand Problem in OCIO and LDI

A significant number of asset owners struggled to name a good OCIO or LDI provider, as JP Morgan and BlackRock topped rankings.

Liability-driven investing (LDI) and outsourced-CIO (OCIO) providers are struggling to make an impact in the minds of their prospective clients, according to a survey of asset owners.

The top three ranked providers in each area were among the biggest asset managers in the world, market research consultancy Market Strategies International found. BlackRock, JP Morgan Asset Management, and Vanguard were the top LDI managers, while JP Morgan, Wells Fargo, and Goldman Sachs Asset Management led the OCIO providers.

Only a small percentage of the numerous asset managers and consulting firms offering these “solutions-based approaches” were finding recognition, Market Strategies reported. More than one-third of responding investors were unable to name an LDI provider they would consider, while 59% could not identify a desirable OCIO provider.

Furthermore, 21% of asset owners who were interested in or already using LDI did not recognize any of the 30 firms provided to them in the survey. Some 11% of investors interested in or using an OCIO provider also could not identify any in a list of 39 providers.

The market leaders were “already atop the leaderboard for their asset management capabilities,” the report said. They also use their LDI and OCIO departments to strengthen relationships with existing clients, creating an “uphill battle” for any new entrants, Market Strategies’ report said.

“While many firms are adding to staff and building expertise in these solutions-focused areas, few firms have yet to establish themselves as serious contenders for these services,” said Linda York, Market Strategies’ senior vice president. “The next step for these firms needs to be concerted marketing and communication effort to boost awareness and attract new business.”

Cogent LDI OCIOSource: Market Strategies International.

Related: 2016 Outsourced-CIO Buyer’s Guide & 2015 Liability-Driven Investment Survey

By Sage Um