There is a significant difference in the approaches of OCIO provider due diligence. The more traditional focus relies heavily, sometimes exclusively, on quantitative measures. Quantitative measures usually focus on returns and fees. While these are important of course, they contain substantial limitations that can impair effective OCIO due diligence and lead to poor outcomes.
An effective approach focuses more on qualitative factors, such as relationship, the process and structures in place to determine strategic asset allocation, portfolio implementation and risk management, and the scope and quality of services available. This still incorporates quantitative factors to be sure, but in proper measure and for the right reasons.
Attached please find our most recent white paper in which we discuss these various qualitative and quantitative factors. We make the case that a more wholistic approach is needed to ensure effective OCIO oversight for the long-term.
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