Survey
Respondent Profile
Respondent Organization Type
| Corporate Pension | 35% |
| Public Pension | 26% |
| Endowment/Foundation | 40% |
| 401(k), 403(b), 457 DC plan | 40% |
| Union Pension | 11% |
| Insurance General Account | 5% |
| Health Care Organization | 11% |
| Sovereign Wealth Fund | 9% |
| Other | 23% |
Respondent Regions Represented
| USA | 79% |
| Canada | 12% |
| Other | 9% |
Respondents by Total Investable Portfolio Size
| <$500MM | 28% |
| $500MM–$1B | 12% |
| >$1B | 60% |
Staffing
Average Size of Investment Staff by Organization Type
| Corporate Pension | 7 |
| Public Pension | 8 |
| Endowment/Foundation | 15 |
| 401(k), 403(b), 457 DC plan | 17 |
| Union Pension | 2 |
| Insurance General Account | 3 |
| Health Care Organization | 2 |
| Sovereign Wealth Fund | 16 |
| Other | 23 |
Average Size of Investment Staff by Region
| USA | 10 |
| Canada | 2 |
| Other | 8 |
Average Size of Investment Staff by Investable Portfolio Size
| <$500MM | 10 |
| $500MM–$1B | 2 |
| >$1B | 9 |
Outsourcing Arrangements
Respondent Outsourcing Situation
| Currently outsource | 30% |
| Plan to outsource in the next 12 months | 2% |
| Plan to outsource in the next 24 months | 7% |
| Do not outsource and no plans to do so | 61% |
% That Outsource or Plan To by Organization Type
| Corporate Pension | 35% |
| Public Pension | 47% |
| Endowment/Foundation | 43% |
| 401(k), 403(b), 457 DC plan | 30% |
| Union Pension | 50% |
| Insurance General Account | 67% |
| Health Care Organization | 17% |
| Sovereign Wealth Fund | 40% |
| Other | 23% |
% That Outsource or Plan To by Region
| USA / Canada | 40% |
| Other | 20% |
% That Outsource or Plan To by Investable Portfolio Size
| <$500MM | 56% |
| $500MM–$1B | 71% |
| >$1B | 24% |
Types of Outsourcing Arrangements Used/Planned
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| Full discretion | 53% | 67% | 33% | 50% |
| Partial discretion | 47% | 33% | 67% | 50% |
How Much of the Portfolio Is Outsourced
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| 100% outsourced | 35% | 57% | 33% | 14% |
| 75% – 99% outsourced | 24% | 0% | 33% | 43% |
| 50% – 74% outsourced | 0% | 0% | 0% | 0% |
| 25% – 49% outsourced | 18% | 14% | 33% | 14% |
| <25% outsourced | 24% | 29% | 0% | 29% |
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 | 4.4 | 6% | 0% | 6% | 25% | 63% |
| Cost savings | 2.9 | 13% | 19% | 44% | 13% | 13% |
| Lack of internal resources | 4.1 | 6% | 6% | 12% | 24% | 53% |
| Additional fiduciary oversight | 3.8 | 19% | 6% | 6% | 19% | 50% |
| Need to increase returns | 3.7 | 6% | 12% | 18% | 35% | 29% |
| Faster implementation/decisions | 3.9 | 13% | 0% | 6% | 50% | 31% |
| Desire for strategic partnership | 3.4 | 6% | 13% | 31% | 31% | 19% |
Outsourcing Goals
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| Absolute return | 71% | 57% | 100% | 71% |
| De-risking | 29% | 43% | 0% | 29% |
Fee Structures
Outsourcing Fee Structure
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| Flat basis point fees ONLY | 47% | 57% | 33% | 43% |
| Sliding asset-based fees ONLY | 35% | 43% | 67% | 14% |
| Multiple or Other fee structures used | 12% | 0% | 0% | 29% |
| Performance fees ONLY | 6% | 0% | 0% | 14% |
Non-Outsourcers
To your knowledge, have any OCIO providers attempted to win your business in the past 12 months?
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| No | 69% | 67% | 65% | 77% |
| Yes | 31% | 33% | 35% | 23% |
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 | 4.0 | 5% | 3% | 20% | 35% | 38% |
| Cost | 3.9 | 3% | 10% | 15% | 43% | 30% |
| Sufficient internal expertise | 4.2 | 0% | 0% | 15% | 53% | 33% |
| No need for additional fiduciary oversight | 3.3 | 15% | 8% | 28% | 30% | 20% |
| Satisfied with returns produced internally | 4.5 | 0% | 0% | 3% | 45% | 53% |
| Satisfied with speed of implementation | 4.3 | 0% | 5% | 10% | 33% | 53% |
| No desire for partnership with outside firm | 3.2 | 20% | 10% | 28% | 18% | 25% |