In our recent paper focusing on smaller faith-based asset owners, and my session at the CIIC event in Chicago, we highlighted three solutions to help asset owners pursue faith-consistent investing: Outsourced Chief Investment Officer (OCIO), Investments Consultants (sometimes both exist in the same organization), and Consortiums and Networks.
A recent institutional investor survey by the endowments and foundations team at global money manager Blackrock shows that OCIO use is indeed correlated with the size of the organization, which itself – as we also note – has a high correlation with the availability of internal resources, risk management capabilities and desire for access to “unique” investments:
Over one-third of 'smaller' – sub US$1 billion in assets – today use an OCIO for the reasons noted in the pink bars, and a further 6% of total respondents noted they are currently considering OCIO.
Interestingly, the survey finds that 49% of respondents have prioritized “aligning mission and values” as their governance priority in the coming year, ahead of 35% revising investment guidelines. I suspect given these governance priorities, OCIO consideration will necessarily rise; faith-consistent investing is not without demands on existing resources, and at some point resource constrained asset owners may need to reach for OCIO and/or other solutions we note.