Consultants expect outsourced CIO business to comprise 18% of assets

25 November 2013   Category: News, Global   By Asia Asset Management

Consultants expect that their outsourced chief investment officer (OCIO) business will comprise 18.5% of total assets in 2016, up from an average of 12% at the end of 2012, new research from Cerulli Associates shows.

"Investment consultants' assets managed under an OCIO arrangement are expected to continue to grow, and for many firms this is the fastest-growing segment of their overall business," states Michele Guiditta, associate director at Cerulli.

Cerulli's latest report: “The Evolving Investment Consulting Industry and Business Model: Opportunities for Institutional Asset Managers”, provides insights about the institutional investment consulting industry and how asset managers can collaborate with consultants to meet institutions' expanding needs and grow assets.

Consultants with whom Cerulli spoke stated their OCIO business increased significantly in 2013, and that they are anticipating growing interest from institutional clients.

"Over the past decade, institutional investors have been seeking more proactive advice and ceding portfolio decision-making, as investment options have grown increasingly complex and markets have become more volatile," Ms. Guiditta explains. "A number of institutional investors have opted for an OCIO arrangement, delegating oversight and decision-making for all or part of their investment portfolios."

Cerulli believes that the institutional outsourcing trend will continue to experience steady growth, presenting opportunities for consultants, asset managers, and dedicated OCIO providers to gain market share.