The Outsourced Chief Investment Officer (OCIO) market previously saw significant growth with the expectation that growth would slow over the last few years. Recent market dislocation, however, has challenged conventional thinking around this potential growth trajectory as asset owners re-evaluate their go-it-alone strategies and/or their current OCIO providers.
As we consider the evolution of the OCIO market over time, we see parallels between the market reaction to COVID-19, the Tech Bubble of 2002, and the Financial Crisis of 2008. These events are inflection points serving as catalysts for renewed growth. This growth in the marketplace is driving increased competition, reaffirming the need for OCIO firms to adapt to this structural change by redefining their market strategies and target customer segments, while challenging fundamental assumptions about their business models to capitalize on subsequent opportunities.
To be viable, differentiate themselves, and meet the coming surge in demand, leading OCIO firms will need to strengthen infrastructure, capabilities, client reach, and achieve economies of scale with high reliance on technology.
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