Intelligent Outsourcing:
Considering and Selecting an OCIO


Boards of directors, investment committees, corporate officers and plan sponsors all face substantial challenges in carrying out their fiduciary obligations. Common issues include increasingly complex and stringent legislation, higher expected standards in fiduciary management, a greater level of scrutiny and the push to do more with less. Additionally, a market driven by exceptional macroeconomic policies, higher levels of investment complexity and increasing financial demands creates a more challenging environment for investment portfolios that support their financial obligations.

To reconcile competing claims on senior executives’ attention, organizations are revisiting their existing investment processes and investment manager relationships. By ensuring that the investment portfolio is managed by a fiduciary investment manager, in accordance with guidelines and goals set by leadership, executives can contribute their talents at the “highest and best use” level. Institutions without a chief investment officer can outsource their investment management, freeing boards of directors and plan sponsors to focus on providing the leadership, guidance and oversight their organizations require. While outsourcing the investment function does not relieve the board of its fiduciary obligations—the responsibility for the hiring and oversight of the investment management firm remains with them—it allows them to work alongside a “co-fiduciary” who manages the investment process within board guidelines.

This paper examines when the outsourced chief investment officer (or “OCIO”) arrangement may be appropriate for an organization. We consider how this collaborative relationship can help the leadership team balance its responsibilities to the organization and its mission by providing fiduciary leadership and oversight. Finally, we outline the process for selecting the appropriate investment manager and what to expect as you transition your investment portfolio. This holistic approach provides an investment process that is designed, executed and evaluated in terms of its abilities to fulfill the organization’s financial responsibilities and goals.

Institutional Investments & Philanthropic Solutions is part of U.S. Trust, Bank of America Corporation (U.S. Trust). U.S. Trust operates through Bank of America, N.A. and other subsidiaries of Bank of America Corporation (BofA Corp.). Bank of America, N.A., Member FDIC. Trust and fiduciary services and other banking products are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A.

Bank of America, N.A. makes available investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp.


26490234 (JCA*******803)