Two-Phase Evaluation and RFP/Search Engagement Results in Better Aligned Investments, Significant Cost Reduction and Enhanced Confidence for East Coast University Endowment
Background
A $300 million university endowment engaged North Pier Search Consulting to evaluate its investment program and ultimately to lead a search for a new OCIO. The endowment had been managed by its incumbent OCIO for several years, but the investment committee decided it was time to reassess its strategy due to concerns about performance, fees, and governance practices.
Process & Findings
Phase One: OCIO Evaluation
North Pier’s evaluation of the investment program and the incumbent OCIO focused on several critical factors, including historical performance analysis to relevant peers and benchmarks, governance and strategy assessments and fee benchmarking.
The evaluation highlighted concerns such as weak performance in public markets, overexposure to hedge funds, and inadequately robust reporting, lacking in-depth analysis and evidence of effective risk management. Based on these findings, the committee decided to proceed with a search for a new OCIO provider.
Phase Two: OCIO RFP/Search
Working with the endowment’s investment committee, North Pier defined a clear set of RFP/search criteria which helped guide the RFP process and ensure that the candidates aligned with the endowment’s needs.
After reviewing the proposals and conducting a thorough analysis, the committee narrowed the search down to three finalists. These firms were selected based on their proven capabilities in key areas such as risk management, access to high quality PE managers, portfolio construction, and fiduciary support.
Following finalist presentations, the endowment’s investment committee chose a new OCIO provider. Key decision factors included the firm’s depth of expertise and tailored approach to asset allocation, strong track record of risk-adjusted performance and competitive fees.
Results
Through North Pier’s evaluation and RFP/search process, the endowment secured a new OCIO partner, improving investment management and aligning strategies with industry best practices. The transition will drive over 50% in annual savings on OCIO fees, with further reductions in manager fees. Additionally, the process enhanced the Committee’s fiduciary oversight capabilities through valuable education and training.