North Pier’s strategic two-phase evaluation & search project for a $350 million family office resulted in enhanced services and meaningful fee savings.
Background
Engaged to enhance their investment strategy and find the optimal investment partner, North Pier assisted a $350 million family office through a two-phase evaluation and Outsourced Chief Investment Officer (OCIO) search. The family, spanning three generations and encompassing a multitude of entities including individual trusts, family partnerships, and a foundation, had a long-standing relationship with their incumbent OCIO, which prompted their decision to engage North Pier as an objective, third party advocate.
North Pier’s goal was to critically assess the family’s current provider first and then, upon analysis, conduct a comprehensive search process for the family to move forward with a new provider.
The Evaluation Phase: Education, Discovery, and Analysis
Initially, the project’s focus was on the family’s foundation, and extensive fiduciary education and training was provided. This step was vital for enlightening family members on the critical nature of their decision-making, fostering a proactive and engaged approach throughout the process.
The foundation’s initial evaluation revealed persistent underperformance by the existing provider, partly due to an outdated asset allocation strategy. Upon presenting and discussing these findings with the staff and Committee, it became evident that in order to meet the family’s objectives, the scope needed to be expanded to encompass the entire portfolio, necessitating a comprehensive OCIO search.
The Search Phase
North Pier crafted a custom Request for Proposal (RFP) process to find the most suitable OCIO for the family’s unique needs. Leveraging an extensive database and research on OCIO firms, North Pier identified seven candidates with deep experience in managing complex family and foundation structures to receive the RFP.
Following a meticulous analysis of RFP responses, including a thorough review of each candidate’s track record, North Pier met with the client to determine three finalists. North Pier coordinated and facilitated presentations from each OCIO finalist candidate and conducted subsequent analyses to refine the Committee’s choices. Playing a crucial role in these presentations, North Pier structured the topics to be addressed and equipped the family with targeted questions to focus discussions on substantive, decision-relevant information, rather than a marketing focus from the presenters.
Results: Enhanced Investment Portfolio, Tailored Service, and Meaningful Fee Savings
The evaluation and search process culminated in the selection of a new OCIO that not only aligns with the family’s vision but also offers an institutional-quality portfolio customized for the varied needs of each stakeholder.
This transition has not only provided the family with confidence regarding their investment provider, but it also helped them realize substantial cost savings. By reducing combined OCIO and investment fees by an estimated 16 basis points, the family is saving approximately half a million dollars annually, which will allow for significant compounded benefit to future generations.
Through this strategic process, guided by North Pier’s expertise, the family has strengthened its investment strategy, ensuring it is well-aligned with their mission and securing a legacy of informed, effective financial stewardship.