Survey
Respondent Profile
Respondent Organization Type
| Corporate pension | 22% |
| Public pension | 13% |
| Endowment or foundation | 42% |
| 401(k), 403(b) or 457 defined contribution plan | 22% |
| Union pension | 2% |
| Health care organization | 2% |
| Sovereign wealth fund | 2% |
| Other | 31% |
Respondent Regions Represented
| U.S. | 87% |
| Canada | 4% |
| Other | 9% |
Respondents by Total Investable Portfolio Size
| <$500MM | 31% |
| $500MM–$1B | 16% |
| >$1B | 53% |
Staffing
Average Size of Investment Staff by Organization Type
| Corporate pension | 9 |
| Public pension | 9 |
| Endowment or foundation | 4 |
| 401(k), 403(b) or 457 defined contribution plan | 4 |
| Union pension | 0 |
| Health care organization | 19 |
| Sovereign wealth fund | 45 |
| Other | 4 |
Average Size of Investment Staff by Region
| U.S. | 4 |
| Canada | 0 |
| Other | 22 |
Average Size of Investment Staff by Investable Portfolio Size
| <$500MM | 1 |
| $500MM – $1B | 8 |
| >$1B | 8 |
Outsourcing Arrangements
Respondent Outsourcing Situation
| Currently outsource | 49% |
| Plan to outsource in the next 12 months | 0% |
| Plan to outsource in the next 24 months | 2% |
| Do not outsource and no plans to do so | 49% |
Initiated a Search to Replace Existing OCIO Provider(s)
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| Yes | 19% | 0% | 33% | 25% |
| Plan to in the next 12 months | 6% | 0% | 33% | 0% |
| Do not plan to in the next 12 months | 75% | 100% | 33% | 75% |
Percentage That Outsource or Plan To by Organization Type
| Corporate pension | 30% |
| Public pension | 50% |
| Endowment or foundation | 58% |
| 401(k), 403(b) or 457 defined contribution plan | 50% |
| Union pension | 100% |
| Health care organization | 0% |
| Sovereign wealth fund | 0% |
| Other | 36% |
Percentage That Outsource or Plan To by Region
| U.S. / Canada | 51% |
| Other | 50% |
Percentage That Outsource or Plan To by Investable Portfolio Size
| <$500MM | 57% |
| $500MM – $1B | 43% |
| >$1B | 50% |
Types of Outsourcing Arrangements Used/Planned
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| Full discretion | 52% | 50% | 33% | 60% |
| Partial discretion | 48% | 50% | 67% | 40% |
Amount of the Portfolio Outsourced
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| 100% outsourced | 57% | 63% | 33% | 60% |
| 75% – 99% outsourced | 10% | 25% | 0% | 0% |
| 50% – 74% outsourced | 19% | 13% | 33% | 20% |
| 25% – 49% outsourced | 5% | 0% | 33% | 0% |
| <25% outsourced | 10% | 0% | 0% | 20% |
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 | |
| Lack of internal resources | 4.2 | 5% | 0% | 23% | 18% | 55% |
| Faster implementation/decisions | 3.9 | 9% | 5% | 14% | 36% | 36% |
| Need to increase returns | 3.9 | 5% | 5% | 27% | 27% | 36% |
| Better risk management | 3.7 | 9% | 9% | 9% | 45% | 27% |
| Additional fiduciary oversight | 3.6 | 5% | 23% | 5% | 41% | 27% |
| Cost savings | 3.0 | 14% | 32% | 9% | 36% | 9% |
| Desire for strategic partnership | 2.9 | 23% | 18% | 18% | 27% | 14% |
Outsourcing Goals
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| Absolute return | 67% | 50% | 67% | 80% |
| De-risking | 19% | 25% | 0% | 20% |
| Other | 14% | 25% | 33% | 0% |
Fee Structures
Outsourcing Fee Structure
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| Flat basis point fees only | 43% | 50% | 33% | 40% |
| Sliding asset-based fees only | 38% | 25% | 33% | 50% |
| Multiple or other fee structures used | 14% | 25% | 33% | 0% |
| Performance fees only | 5% | 0% | 0% | 10% |
Non-Outsourcers
OCIO Providers Have Attempted to Win My Business in the Past 12 Months
|
All respondents
|
<$500MM
|
$500MM–$1B
|
>$1B
|
|
| No | 55% | 67% | 67% | 46% |
| Yes | 45% | 33% | 33% | 54% |
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 | |
| Satisfied with returns produced internally | 4.5 | 0% | 0% | 5% | 41% | 55% |
| Sufficient internal expertise | 4.4 | 0% | 5% | 5% | 41% | 50% |
| Satisfied with speed of implementation | 4.3 | 0% | 5% | 5% | 50% | 41% |
| Execute better risk management in-house | 4.2 | 0% | 0% | 23% | 36% | 41% |
| Cost | 4.0 | 5% | 0% | 27% | 27% | 41% |
| No need for additional fiduciary oversight | 3.7 | 5% | 5% | 27% | 41% | 23% |
| No desire for partnership with outside firm | 3.4 | 13% | 0% | 35% | 35% | 17% |