Institutional Investor recently featured North Pier’s managing partner, Jim Scheinberg in its recent article on the lack of track record standards in the OCIO industry and what he and fellow industry peers are trying to do about it.
The outsourced chief investment officer industry has exploded in size in recent years. No longer the domain of corporate pension funds looking to offload assets, institutional investors from endowments to public pension funds are now using OCIOs, a trend that continues to gain traction. While OCIO firms have taken on ever-larger mandates, however, they haven’t yet caught up to their institutional peers in one major way: industry benchmarking and standardization.
Jim Scheinberg, founder of OCIO consulting firm North Pier Consulting, compares the fast-growing industry to “the Wild West,” saying that industry standards haven’t kept up with the growth.
“The industry has zero standards,” Scheinberg said by phone. “There is no oversight at all.”
OCIO firms say it is hard to measure their performance and outcomes against some sort of benchmark, because their clients have different risk profiles and investment goals from one another. But their potential clients — large institutions and asset management firms — want to be able to compare performance, and they aren’t accepting that answer anymore.
Two groups are now working to change this. One made up of the largest providers in the industry. The other is the CFA Institute, which aims to set standards for the investment management industry…