The Most Overlooked Element of the OCIO Relationship

August 6, 2021 |
2 minute read
|

When properly implemented, outsourcing the investment of nonprofit assets can help institutions establish governance processes, manage a complex portfolio, and navigate operational complexity and risk management challenges.

We believe your financial partner should be an extension of your organization. Commonfund’s Outsourced Chief Investment Office (“OCIO”) program extends beyond the Investment Officer to include Investment Analysts, an Operational Servicing Team, and a Relationship Manager.

The OCIO Team develops a deep understanding of your entire organization so that they can serve as a strong partner, collaborating with you to oversee the total enterprise. We have found over many years of working with our OCIO clients that the extended services beyond investment execution are highly valued but often overlooked in the search/RFP process.

With that in mind, here are four questions that you should consider when selecting your Outsourced Chief Investment Office.

Does your OCIO partner facilitate daily operational responsibilities, freeing your staff to manage other projects and priorities?

One of our key differentiators is the high touch service we deliver to our clients. Beyond portfolio management, our outsourced operations team will work closely with your business office and deliver daily support in the areas of cashflow management, portfolio rebalancing, administration, portfolio reconciliation and accounting, investment reporting and audit support. Moreover, the team will track all capital call and distribution activity for illiquid programs and will coordinate capital call and distribution management.

Does your OCIO partner include an independent risk, legal, compliance and operations teams that conduct operational reviews and ongoing due diligence of all third-party investment managers?

Our teams perform operational reviews and due diligence and reach consensus on any issues prior to final investment manager approval. These teams also conduct ongoing manager monitoring and reviews. Importantly, as your OCIO, we review offering documents, and to help alleviate the burden on staff, complete subscription materials for new investments.

Does your OCIO partner provide complete transparency?

Portfolio transparency is an important tool to facilitate effective oversight. Commonfund recognizes how critical this component is and delivers timely reports that include: consolidated statements, detailed portfolio investment reports, financial reports, fees, and other materials. Reports are available on our client portal for convenient access. The team is available to provide information and respond to inquiries from your staff and audit teams.

Does your OCIO partner offer support during audit season?

Your OCIO team should be a resource you can lean on during this hectic time. Commonfund offers resources in support of your audit needs, including comprehensive audit report packages, consolidated financial statements, and will work directly with your auditors as needed.

These operational services delivered to your internal staff by the OCIO team are often less of a focus yet are critical elements to the success of your organization.

To learn more about Commonfund’s OCIO services click here.

Amy Harlacker

Author

Amy Harlacker

Managing Director, Head of Operations

Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.

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Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.