Outsourced Chief Investment Officer (OCIO)

What is an OCIO? 

An Outsourced Chief Investment Officer (OCIO) is a third-party investment professional or firm that provides comprehensive investment management services for an organization. These services typically include investment strategy development, asset allocation, manager selection, risk management, and performance monitoring.  

The OCIO model has gained popularity among investors, such as pension funds, endowments, foundations, and insurers, as it enables them to outsource elements of their investment decision-making process. It also allows them to allocate to diversified asset classes and managers they may not otherwise have access to directly. 

To see strategies and services for outsourced managers in the insurance industry, check out the 2024 Insurance Investment Outsourcing Report. This “yellow pages” of insurance asset managers provides valuable market insights to insurers of all types, sizes, and geographies who are looking to leverage managers to run their general account. 

By hiring an OCIO, organizations can benefit from the expertise, resources, relationships, and infrastructure that these external investment professionals offer. The OCIO model allows for a more efficient and cost-effective approach to investment management, as it reduces the need to maintain a large, internal investment team.  

Additionally, OCIOs may provide access to a broader range of investment opportunities and strategies, which can potentially lead to better performance and risk management. Importantly, an OCIO can oversee the collective portfolio, across strategies, including often difficult to monitor elements around ESG, SRI, and faith-based directives. 

Interested in learning more about OCIOs? Talk to an expert to learn more about the current OCIO market. 

Why is technology becoming more important for OCIOs? 

Investors look for an OCIO firm with a proven track record in developing and implementing successful investment strategies. They seek expertise in asset allocation, risk management, manager selection, monitoring, and a single consolidated view across their portfolios. To ensure a consolidated view, the technological solutions for monitoring compliance, allocation, and performance across managers are critical. 

The right technology helps to make the most out of a dynamic market and growing competitive forces. Institutional investors expect an OCIO firm to have state-of-the-art investment accounting, reporting and analytical capabilities that can provide maximum transparency into their investment portfolio.  

Timely and accurate reporting is crucial for monitoring investment performance, tracking compliance, and fulfilling regulatory requirements. A comprehensive technology platform can automate these often-manual processes, mitigating errors and providing real-time access to investment data when and where investors need it.  

Furthermore, an investment accounting platform should be capable of handling complex investment structures, multiple asset classes, and sophisticated risk management analytics to mitigate potential risks better.  

To learn more about the innovative technology that OCIOs are using, talk to an expert today. 

How does Clearwater Help OCIOs? 

Clearwater works with some of the world’s largest OCIOs to solve their operational challenges. Clearwater provides daily automated investment data aggregation, portfolio accounting, performance monitoring, investment policy compliance, and reporting needs on more than $6.4 trillion in assets globally. 

As an end-to-end solution for OCIOs, Clearwater provides portfolio management, rerouting, and data aggregation on tradable assets. The solution includes: 

• Portfolio management, order management, pre- and post-trade compliance, portfolio administration, risk, performance, CRM, data management, accounting, and reporting.  
• Robust portfolio re-balancing and allocation tooling, with the ability to act with the click of a button.  
• Data aggregation on tradeable assets powered by world-class reporting tools, and the ability to track activity from all angles with dashboards, KPIs, multiple formats, and custom reports. 

Our web-based, single-instance, multi-tenant platform provides daily visibility into clients’ portfolios. Users can create their own reports on the fly, querying the data with attributes across 40+ data providers. Holdings, transactions, exposures, performance, and compliance are easily accessible to OCIOs and their end clients. High quality, accurate data can be integrated into other systems for timely and efficient reporting. 

Clearwater has established connections with hundreds of custodians and institutional managers to source investment data daily, validate positions, pricing and security attributes and reconcile with trading systems to ensure that we feed clean data every day to our clients. 

When managers create private funds, daily pricing may not be available to the OCIOs. Clearwater tracks these funds to their assigned benchmark to calculate a daily “shadow” NAV. This allows OCIOs to track performance daily, with up-to-date data. 

Ready to learn more about Clearwater for OCIOs? Schedule a call to talk to an expert today. 

For more information about investment outsourcing in the insurance market, download the 2024 Insurance Investment Outsourcing Report to see investment manager profiles of over 65 participating managers, including services and investment strategies. The report includes rankings of insurance investment manager leaders both on global and regional bases.