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More foundations turn to OCIOs while demanding collaboration

Over the last two years, private and community foundations have shown a growing interest in outsourced CIO. This comes as no surprise, as economic uncertainty can put extra pressure on investment committees, causing them to look for ways to alleviate some of the stress of managing the investment portfolio.

A recent study supports the trend showing that private foundations involved in OCIO have increased by 10% since 2018 and community foundations increased by 6%.

"The biggest motivator is simple: the hunt for returns in a difficult landscape."

MJ Bobyock

The biggest motivator for partnering with an OCIO is simple, according to MJ Bobyock, Director of Nonprofit Advice. It's the hunt for returns in a difficult landscape. Most foundation boards and investment committees are run by those working on a part-time basis. It can be complicated when searching for a higher-returning portfolio and making sure that it is being managed with the proper due diligence.

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Information provided by SEI Investments Management Corporation, a registered investment adviser and wholly owned subsidiary of SEI Investments Company (SEI). Neither SEI nor its subsidiaries is affiliated with any firms mentioned herein.

Investing involves risk including possible loss of principal. Diversification may not protect against market risk. There is no assurance that an investment strategy or risk management will be successful. Alternative investments are subject to a complete loss of capital and are only appropriate for parties who can bear that risk and the illiquid nature of such investments.

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