Survey
Respondent Profile
Respondent Organization Type
| Corporate Pension | 30% |
| Public Pension | 20% |
| Endowment/Foundation | 39% |
| 401(k), 403(b), 457 DC plan | 31% |
| Other | 8% |
Respondent Regions Represented
| USA | 75% |
| Canada | 13% |
| Other | 12% |
Respondents by Total Investable Portfolio Size
| <$500MM | 33% |
| $500MM–$5B | 38% |
| >$5B | 30% |
Staffing
Average Size of Investment Staff by Organization Type
| Corporate Pension | 5 |
| Public Pension | 3 |
| Endowment/Foundation | 4 |
| 401(k), 403(b), 457 DC plan | 6 |
| Other | 7 |
Average Size of Investment Staff by Region
| USA | 4 |
| Canada | 2 |
| Other | 15 |
Average Size of Investment Staff by Investable Portfolio Size
| <$500MM | 2 |
| $500MM–$5B | 4 |
| >$5B | 8 |
Outsourcing Arrangements
Respondent Outsourcing Situation
| Currently outsource | 30% |
| Do not outsource and no plans to do so | 70% |
% That Outsource or Plan To by Organization Type
| Corporate Pension | 28% |
| Public Pension | 0% |
| Endowment/Foundation | 33% |
| 401(k), 403(b), 457 DC plan | 47% |
| Other | 0% |
% That Outsource or Plan To by Region
| USA / Canada | 33% |
| Europe / Pacific | 0% |
% That Outsource or Plan To by Investable Portfolio Size
| <$500MM | 50% |
| $500MM–$5B | 26% |
| >$5B | 11% |
Types of Outsourcing Arrangements Used/Planned
|
All respondents
|
<$500MM
|
$500MM–$5B
|
>$5B
|
|
| Full discretion | 59% | 56% | 83% | 0% |
| Partial discretion | 41% | 44% | 17% | 100% |
How Much of the Portfolio Is Outsourced
|
All respondents
|
<$500MM
|
$500MM–$5B
|
>$5B
|
|
| 100% outsourced | 83% | 100% | 67% | 50% |
| 75% – 99% outsourced | 11% | 0% | 33% | 0% |
| 50% – 74% outsourced | 0% | 0% | 0% | 0% |
| 25% – 49% outsourced | 0% | 0% | 0% | 0% |
| <25% outsourced | 6% | 0% | 0% | 50% |
Reasons for Outsourcing
Reasons for Outsourcing and Their Importance
1=Not at all important; 2=Slightly important; 3=Moderately important; 4=Important; 5=Very important
| Score | 1 | 2 | 3 | 4 | 5 | |
| Better risk management | 4.3 | 0% | 6% | 11% | 33% | 50% |
| Cost savings | 3.2 | 22% | 11% | 11% | 39% | 17% |
| Lack of internal resources | 4.2 | 0% | 11% | 17% | 17% | 56% |
| Additional fiduciary oversight | 4.1 | 0% | 11% | 17% | 28% | 44% |
| Need to increase returns | 3.6 | 6% | 0% | 33% | 50% | 11% |
| Faster implementation/decisions | 3.9 | 6% | 0% | 22% | 39% | 33% |
| Desire for strategic partnership | 3.4 | 22% | 0% | 17% | 33% | 28% |
Outsourcing Goals
|
All respondents
|
<$500MM
|
$500MM–$5B
|
>$5B
|
|
| Absolute return | 67% | 60% | 100% | 0% |
| De-risking | 33% | 40% | 0% | 100% |
Fee Structures
Outsourcing Fee Structure
|
All respondents
|
<$500MM
|
$500MM–$5B
|
>$5B
|
|
| Flat basis point fees ONLY | 67% | 80% | 67% | 0% |
| Sliding asset-based fees ONLY | 28% | 10% | 33% | 100% |
| Multiple or Other fee structures used | 6% | 10% | 0% | 0% |
| Performance fees ONLY | 0% | 0% | 0% | 0% |
Non-Outsourcers
To your knowledge, have any OCIO providers attempted to win your business in the past 12 months?
|
All respondents
|
<$500MM
|
$500MM–$5B
|
>$5B
|
|
| No | 73% | 44% | 71% | 93% |
| Yes | 27% | 56% | 29% | 7% |
Reasons for Not Considering an Outsourcing Arrangement and Their Importance
1=Not at all important; 2=Slightly important; 3=Moderately important; 4=Important; 5=Very important
| Score | 1 | 2 | 3 | 4 | 5 | |
| Execute better risk management in-house | 4.2 | 0% | 2% | 17% | 39% | 41% |
| Cost | 3.9 | 3% | 13% | 15% | 35% | 35% |
| Sufficient internal expertise | 4.2 | 2% | 2% | 12% | 39% | 44% |
| No need for additional fiduciary oversight | 3.5 | 7% | 12% | 27% | 27% | 27% |
| Satisfied with returns produced internally | 4.4 | 2% | 0% | 5% | 44% | 49% |
| Satisfied with speed of implementation | 4.2 | 0% | 2% | 17% | 41% | 39% |
| No desire for partnership with outside firm | 3.5 | 10% | 10% | 20% | 39% | 22% |