North Pier was engaged to lead an OCIO search for a city employee retirement system’s $1.4 billion plan.
The plan recently approached a full funding level, and the city enacted a soft freeze of the plan by closing it to new participants. As a result, the Committee and staff determined to review the optimal investment approach going forward. They also believed it was an opportune time to implement an OCIO service model from a traditional non-discretionary consulting format to more fully assist the Committee and staff in fulfilling their responsibilities. The staff also desired to carefully evaluate the administrative support that would be available.
To begin the search process, North Pier conducted Committee and staff interviews and also provided fiduciary education to the client on the state of the industry, as well as details on the OCIO service model.
Once a comprehensive client profile was constructed and qualified candidates were identified, North Pier ran an OCIO RFP with eight organizations submitting proposals, excluding the incumbent who would not bid on OCIO as they operate in a traditional non-discretionary consulting model. North Pier then standardized responses and performed quantitative performance analysis and a qualitative evaluation of candidates.
The Committee then used the information provided in a decision ready report format to determine four finalists. Once North Pier completed due diligence and reference checking on finalists, North Pier facilitated finalist presentations with four OCIO firms.
After finalist meetings, North Pier was able to negotiate a 30% reduction in fees from the front runner prior to accepting the contract.
The front runner was then selected as the client’s new provider. By moving to OCIO, along with a reduction in fees, the client was able to increase accountability in support of the fiduciary responsibilities and significantly reduce staff administrative burden. The client and OCIO will work together on defining and documenting the new investment approach to match the plan’s status and demographics moving forward.