Survey
Outsourcing Situation/Staffing Resources
| AVG SIZE OF INVESTMENT STAFF |
||
| Currently outsource or plan to in next 24 months | 40% (-4%) | 14 (+27%) |
| Do not outsource, and no plans to do so | 60% (+3%) | 9 (-25%) |
Respondent Organization Type/Staffing Resources/
Outsourcing Situation
| ORGANIZATION TYPE | AVG SIZE OF INVESTMENT STAFF |
% THAT OUTSOURCE/PLAN TO |
|
| Corporate pension | 33% (-9%) | 5 | 31% (-30%) |
| Public pension | 23% (+8%) | 15 | 41% (+27%) |
| E&F/Nonprofit | 29% (+18%) | 6 | 26% (-29%) |
| Health Care | 5% (-29%) | 2 | 33% (-7%) |
| 401(k), 403(b), or 457 DC plan | 16% (+7%) | 2 | 63% (+21%) |
| Other | 19% (+48%) | 24 | 48% (0%) |
Regions Represented/Staffing Resources/Outsourcing Situation
| REGION | AVG SIZE OF INVESTMENT STAFF |
% THAT OUTSOURCE/PLAN TO |
|
| US/Canada | 88% (-1%) | 7 | 40% (-2%) |
| Europe | 8% (+11%) | 10 | 11% (-56%) |
| Other | 4% (-14%) | 85 | 60% (+7%) |
Total Investable Portfolio/Staffing Resources/
Outsourcing Situation
| PORTFOLIO SIZE | AVG SIZE OF INVESTMENT STAFF |
% THAT OUTSOURCE/PLAN TO |
|
| <$100M | 17% (+21%) | 1 | 70% (+46%) |
| $100M–$500M | 15% (-5%) | 4 | 78% (+30%) |
| $500M–$1B | 5% (-61%) | 3 | 17% (-68%) |
| $1B–$5B | 27% (+4%) | 4 | 25% (-38%) |
| $5B–$15B | 17% (+30%) | 7 | 20% (+54%) |
| >$15B | 19% (+4%) | 42 | 23% (-27%) |
Types of Outsourcing Arrangements Used/Planned
| PROVIDER RECOMMENDS MANAGER SELECTION |
PROVIDER HAS FULL DISCRETION OVER MANAGER SELECTION |
|
| Total respondents | 35% (+17%) | 65% (-7%) |
| <$500M | 29% | 71% |
| $500M–$1B | 0% | 100% |
| >$1B | 35% | 65% |
How Much of the Portfolio Is Outsourced
| 100% | 75% – 99% | 50% – 74% | 25% – 49% | LESS THAN 25% | |
| Total respondents | 62% (+15%) | 7% (-49%) | 7% (+43%) | 7% (+43%) | 17% (-24%) |
| <$500M | 68% | 14% | 0% | 4% | 14% |
| $500M–$1B | 100% | 0% | 0% | 0% | 0% |
| >$1B | 50% | 0% | 17% | 11% | 22% |
Reasons for Outsourcing
| CRITICAL | IMPORTANT | NOT VERY IMPORTANT |
NOT AT ALL IMPORTANT |
NOT APPLICABLE |
|
| Better risk management |
32% | 56% | 5% | 0% | 7% |
| Cost savings |
18% | 40% | 25% | 3% | 14% |
| Lack of internal resources |
58% | 33% | 3% | 0% | 6% |
| Additional fiduciary oversight |
43% | 38% | 8% | 3% | 8% |
| Need to increase returns |
28% | 46% | 13% | 5% | 8% |
| Faster implementation/ decisions |
20% | 43% | 23% | 8% | 6% |
| Desire for strategic partnership |
23% | 33% | 23% | 13% | 8% |
Reasons for Selecting Outsourcing Provider
| Price | 30%(+50%) |
| Reputation/recommendation of peers | 15%(+63%) |
| Experience of top management | 93%(+300%) |
| Client service | 73%(+4%) |
| Breadth of capabilities/services offered | 78%(+290%) |
| Willingness to be a fiduciary responsibility | 75%(+275%) |
Outsourcing Goals
| ABSOLUTE RETURN | DE-RISKING | |
| Total Respondents | 52%(+2%) | 48%(+2%) |
| <$500M | 62% | 38% |
| $500M–$1B | 13% | 88% |
| >$1B | 61% | 39% |
Outsourcing Fee Structure
| TOTAL RESPONDENTS |
<$500M | $500M–$1B | >$1B | |
| Flat fee | 59% (+2%) | 59% | 50% | 63% |
| Performance fee | 11% (-45%) | 0% | 50% | 32% |
| Sliding asset-based | 41% (+5%) | 37% | 50% | 42% |
| Other | 2% (0%) | 4% | 0% | 0% |
Client Satisfaction with Outsourcing Vendor
| VERY SATISFIED |
SOMEWHAT SATISFIED |
NOT VERY SATISFIED |
NOT AT ALL SATISFIED |
|
| Overall client service | 61% (-12%) | 35% (+30%) | 3% (N/A) | 1% (-75%) |
| Investment results | 33% (-41%) | 63% (+47%) | 3% (-200%) | 1% (N/A) |
| Value for fees | 44% (-25%) | 47% (+27%) | 6% (+500%) | 3% (0%) |
| Ancillary services | 46% (-21%) | 38% (0%) | 1% (N/A) | 3% (-25%) |
Reasons for Not Considering an Outsourcing Arrangement
Asked of those who currently have no plans to outsource
| Satisfied with returns produced internally | ||
|
|
Critical | 46% |
|
|
Important | 51% |
|
|
Not very important | 2% |
|
|
Not at all important | 1% |
| Execute better risk management internally | ||
|
|
Critical | 34% |
|
|
Important | 58% |
|
|
Not very important | 6% |
|
|
Not at all important | 1% |
| Sufficient internal resources/expertise | ||
|
|
Critical | 47% |
|
|
Important | 43% |
|
|
Not very important | 7% |
|
|
Not at all important | 3% |
| Cost | ||
|
|
Critical | 39% |
|
|
Important | 50% |
|
|
Not very important | 9% |
|
|
Not at all important | 3% |
To your knowledge, have any OCIO providers
attempted to win your business in the past 12 months?
|
|
Yes | 36% |
|
|
No | 64% (-10%) |