Manager Analysis

Strategic Investment Advice


  Tactical Investment Decisions


    Depth of Investment Experience


      Traditional and Alternative


Below are some of our posted articles that illustrate our principles and goals. 

FundFire featured our research on 35 Endowments and Foundations on How to Size and Structure an In-house Investment Team.

The paper provides empirical data on the size, total compensation, and structure of the largest in-house teams.  Please click on the Advisor Briefs section of the website for the full article.

A byproduct of the research is to assist Investment Committees as they try to properly structure and organize in-house Investment Teams.  

Excerpts from - "Early Converts Rethink OCIO Model" - FundFire, by Aziza Kasumov 

Chris Cutler provided insights on recent Outsourced CIO search trends in a FundFire article.  Chris pointed out the current inflection point for the build an in-house team v. Outsourced CIO investment decision  “[The] break-even point above which it makes sense to run things in-house” is getting close to $500 million to $1 billion, says Chris Cutler, founder of investment consulting firm Manager Analysis. Services.

The article goes further, “With performance in hedge funds and alternatives not being as great as it used to be, “you find situations where…you have boards [at smaller institutions] that are finding that their liquid strategies are doing quite well,” Cutler says.  In those cases, “Why would they outsource?  They can just do it themselves,” he adds.  Additionally, insourcing allows for more tailored services.  “A lot of OCIO’s are focused on performance, not necessarily on institutional cash flow needs.  “People have been with OCIOs long enough to start drawing conclusions”,  Cutler says. (5/19)

Investors Prioritize Outsourced CIO Exit Strategies FundFire by Aziza Kasumov 

Institutional investors are increasingly paying attention to how they might unwind their outsourced CIO (OCIO) relationship – even as they’re just getting started with a new provider. The heightened focus comes after a generation of early OCIO adopters realized that it can take years to get out of some holdings, and they can still incur high fees for “legacy funds” that their old OCIO administered, search consultants tell FundFire.

“It’s very easy to sign up a new OCIO, but the exit strategy is a very critical deficiency,” Tom Donahoe, Managing Director of OCIO search and governance at Manager Analysis Services, said at an OCIO Solutions Summit last week  Donahoe said that often institutional investors don’t discuss exit language “when they jump into an OCIO agreement.” But once a provider is terminated, it’s “pencils down.” That creates “slippage where you can lose real value over a two or three week transition period simply because people are taking their eye off the ball,” Donahoe explained. (shortened for brevity) (6/19)

Interview regarding “Bundled Fees”

Bundled fees are becoming somewhat obsolete.  We are seeing them less frequently and more as a shorthand in discussions during the early stages of an OCIO search.  As OCIO clients focus on obtaining greater price transparency, we are helping them obtain and properly evaluate each of the component parts of total fees.  

With bundled fees, you have an inherent conflict in that any price concessions obtained from underlying managers, may not be passed on fully to the client.  These price concessions typically are due to economies of scale and the buying power of an OCIO. Moreover, allocations might be influenced to go to the manager charging a lower fee.

We believe there are times where it is prudent to pay more for better managers, better access, or to obtain a better portfolio.  As Investment Committee members become more sophisticated, they are using the growing transparency to better negotiate appropriate fee levels. (6/29/19)

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