Who-is-osg

ONE STONE GLOBAL IS DEVELOPING AND IMPLEMENTING A STRATEGY FOR A SCALABLE OUTSOURCED CIO OFFERING

  • *OCIO (or, Outsourced Chief Investment Officer) noun

    Outsourcing is the practice of delegating an entire, or at least significant, portion of the investment office function to a third-party provider, typically an investment management or consulting firm, where those functions are fused into one strategic offering.

THE BENEFITS OF ADAPTING AN OCIO MODEL

As the investment world continues to shift and expand, so does the demand for practiced expertise. Institutional clients are looking for teams of investment professionals to navigate investment strategies and shoulder some of the growing responsibilities of their companies.

OCIOs provide access to a previously fragmented market. This concentration of institutional demand has three major implications for service providers, it creates:

  • the need to increase focus on investment solutions-based services that fuse broad skills sets
  • the need to become strategic partners with clients beyond being merely providers of individual products (the success of which can wax and wane based on performance)
  •  a rapidly changing marketplace where intermediaries become simultaneously sales channels, clients, and competitors – requiring innovation, scale and agility.

*Sources of definition: Common Fund, McKinsey and One Stone

WHY HAVE OCIOs BEEN GROWING SO FAST?

Global Pension Funds Of All Sizes And In Particular Small–Medium Funds Are Becoming More Demanding And Want The Benefits Of Scale. A Global Solution for South Africa

There is a reason why the Global OCIO industry has grown to $1.74 Trillion:

  • According to the 2018 McKinsey Report on global trends in the industry, “Large investors wrestle with asset pools weighed down by the organizational complexity—not to mention mean reverting performance—of hundreds of managers in each sleeve of the portfolio.”
  • Clients are demanding “Fewer but more strategic relationships”. Large, sophisticated institutions are gravitating toward a core set of investment managers that can help them deploy capital at significant scale and with consistent performance. These investors are entering into formal strategic partnerships with their preferred managers, embracing multibillion-dollar separate account mandates, often across multiple product types. They are looking to these managers to fulfill a broad range of needs: advice across their entire portfolios, co-investments in unique opportunities, and research into new markets and emerging asset classes.”
  • OCIOs provide “a set of services in which management of an entire portfolio is outsourced to a third-party provider—” this facilitates accessing a “long tail” of thousands of smaller institutions.”
  • OCIOs are also able to consolidate bargaining power in favor of pension fund clients due increased scale.