OCIO

“Relative to the traditional consultants, an OCIO could be four, five, six times more expensive”

“When we went to an OCIO that had not had any Taft-Hartley experience before, the termination of existing managers and replacement was astonishing. I think there was maybe one manager out of 30 that they kept. Of the existing group.”

“We take that twenty million dollars, put it in a list, and we give that back to the manager, and they make the decision of how they want to allocate, so we're not making the choice of one client over another. We're not choosing OCIO over advisory. They all go …”

“So we have what is now a large OCIO business with probably over twenty billion dollars, over 50 clients. Every portfolio that we build is bespoke.”

“50 plus billion dollars in the OCIO space, close to two hundred billion dollars on the retail advice space.”

“What's changed is the size of the institution that are outsourcing. It's pretty incredible. You have, you know, billion dollar institutions that are outsourcing.”

“The distribution part of the business has become much more concentrated. The OCIO trend, the growth in plan sizes, all that has led to larger asset amounts per relationship.”

“How much portfolio vol can you take before clients start to head for the door? And I think that balance was very much at the forefront. What is the appropriate amount? It can play out in taking less risk than you're supposed to be taking.”

“What changes is when you add many more clients and then all of a sudden your day goes from 80% investing, 20% clients to 20% investing, 80% clients. And now you're in the asset management business.”

“It's very tempting. And some firms have pulled that off. Well, I would say it is a material change in your mission to become a purveyor of asset class fund to funds versus an OCIO. And it's hard to do without a lot of people. Doing a lot of different things. W…”

“I always say anytime you're trying to be the investment office for an institution or a family, you have to clear the highest trust bar in asset management. For a family, it's their hard-earned legacy. For an institution, you're often engaging with a committee …”

“The second phase I like to characterize as the death of diversification in 2015 onwards, which is the more simplistic the portfolio, the better from a returns perspective. The more U.S. Large cap equities you owned, the better your portfolio did, and you reall…”

“Wealth management as both a business and the way it's investing in private markets is institutionalizing itself. Those firms are acquiring OCIOs to Add capabilities that give them institutional quality diligence and processes to invest in private markets.”

“If you look at the original class of OCIOs that was created, most have either pivoted their model to something else, sold themselves, or both.”

“When you're serving multiple clients, you have to make compromises on the portfolio because you can't underwrite 25 different great portfolios. You need economies of scale.”