Charity Assets OCIO Transition and RFP Case Study

Background & Challenges

North Pier was engaged to assist the trustees of a nationally recognized charity considering a transition from traditional advisor-assisted, trustee-directed investment management to a discretionary OCIO manager. The long-time committee chair, who acted as CIO, rotated off the committee. The remaining all- volunteer committee members wanted to enhance the outsourced services to make up for the expertise and time commitment that was lost with the departure. While fund raising is strong, this mission driven organization depends heavily on investment returns and requires both strong and consistent returns to fund critical programming.

Process

  • Committee Education
    • North Pier was able to help the committee envision a new approach with an outsourced CIO.
    • North Pier educated the committee on the state of the industry and the solutions available for OCIO discretionary management.
  • Governance
    • North pier reviewed governance documents including the Committee Charter, Investment Policy Statement and minutes of committee meetings.
    • Amendments and refinements to the documents and fiduciary process were recommended.
    • North Pier also performed a historical review and deep analysis of investment track records.
  • OCIO Search
    • North Pier initially reviewed records and screened (17) potential candidates from which ten (10) were selected for interviews and initial track record analysis. Eight (8) of these organizations passed the quantitative and qualitative screens and were selected to receive the full RFP.
    • We developed and administered an RFP and performed detailed due diligence on eight (8) candidates, including reviewing performance track records and performing in-depth investment analysis.
  • Finalist Selection and Interviews
    • North Pier assisted the committee in selecting three (3) finalists who were invited to participate in in-person interviews at the client’s headquarters.
    • North Pier developed a structure for the presentations, prepared the finalists and facilitated the interviews.

Additional Due Diligence

Additional due diligence on the leading finalists revealed erroneous or misleading statements with regards to fees and OCIO revenue. This organization was eliminated, and the remaining organizations were re-interviewed by the committee.

Outcome

The money saved in fees will make a meaningful impact on people’s lives.

The Trustees selected an OCIO whose process, style, track record and investment approach best matched desired characteristics. This organization’s incremental approach to generating alpha was a good solution to the challenge of pursuing growth while maintaining stability.

On behalf of the client, North Pier negotiated favorable fees and a new service agreement. After negotiating a significant decrease in fees, the charity expects an estimated 18 bps reduction in total fees allowing a meaningful impact on persons benefiting from the program.

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