It is a growing trend among institutions and non-profits to seek an outsourced chief investment officer (OCIO) to serve as the fiduciary, discretionary investment provider. An OCIO is a third-party extension of the institutions’ staff responsible for some or all of the day-to-day investment decision making. This is occurring frequently across organizations and institutions, particularly non-profits, who are trying to maximize in-house resources.

Efficiency and research

There are many benefits to having an OCIO, with the most notable being the time, dedication and research abilities behind the team making investment decisions. An OCIO continuously monitors the markets and is making decisions based on market research and best practices. And, they can utilize that research and apply investment knowledge that a traditional CIO within the nonprofit organization might have a tough time keeping up with due to other strategic demands of the organization.

Nimble investment decision-making

An OCIO acts as a discretionary investment manager which means they have full capabilities to make investing decisions within an investment policy guideline. If the organization needs assistance to create an investment policy statement (IPS), the OCIO will work with the client to develop this governing document. The IPS sets the parameters the OCIO works within, allowing the OCIO to make timely investment decisions and implement modifications within IPS guidelines. This approach helps avoid potential delays caused by seeking approval from the institution’s board of directors – which often takes months and may result in missed opportunities. This nimble approach can help nonprofits and institutions quickly adjust and adapt investment strategies as the markets shift or financial priorities change.

Independent fiduciary

Another benefit to having an OCIO is that they own the investment performance and assume fiduciary responsibility. The institution creates a policy benchmark through assessment and risk analysis to determine what they expect from their OCIO, who is then tasked with, at minimum, upholding those benchmarks and working in the organization’s best interests.

Access to industry expertise

In addition to the investment management benefits, there is also a constant level of education and interaction with board and community members that an OCIO can provide for an institution.

Our approach

The UMB team always tries to offer something additional to investment management and works to provide diverse financial solutions. By leveraging the background of our team, UMB provides educational content to help organizations work toward their goals.

UMB Institutional Investment Management strives to reach and exceed your expectations. Learn more about our approach to nonprofit investing at our website.