OCIO stands for Outsourced Chief Investment Officer, or outsourced investment management. It refers to the full or partial outsourcing of an organizations investment function to a third party, such as an asset management firm or investment consultant. In delegating investment tasks to a third party, the organization typically retains some level of fiduciary responsibility, often maintaining control over the strategic asset allocation, while other fiduciary duties are transferred to the outsourced CIO provider.

An OCIO provider can help organizations by offering improved access to best-in-class investment managers on a global scale, and by having a dedicated team of in-house specialists to provide daily oversight and strategic advice. The right provider will be able to extensively research and rate thousands of investment managers and opportunities to find those ideally suited to an organizations portfolio.

OCIO clients can tap into a full toolkit of investment capabilities, including active, index, factors, and alternatives, and dedicated manager research to help achieve better investment outcomes. The OCIO provider takes on fiduciary responsibility, and often ownership of certain operational services, while the asset owner continues to retain full authority over asset allocation, as well as risk and return.

There is no cookie-cutter approach to OCIO, and the goals and objectives of organizations that have made the decision to outsource vary widely across the spectrum, and so too do the range of potential solutions. The fastest-growing segment in asset management is the outsourced chief investment officer industry.

In summary, OCIO is a specialized investment firm that replicates the experience of having an in-house chief investment officer, supported by a deep bench of asset class specialists and a fully-staffed back office.