{"concept_id":"ALTSS-ALLOC-024","slug":"ocio","canonical_name":"Outsourced Chief Investment Officer","acronym":"OCIO","aliases":["OCIO","outsourced CIO","fiduciary manager","fiduciary management"],"kind":"entity_type","authority":"industry","facets":["INT"],"domains":["INSTITUTIONAL-INVESTORS"],"display_title":"Outsourced Chief Investment Officer (OCIO)","search_aliases":["what is an ocio","ocio vs investment consultant","outsourced chief investment officer meaning","fiduciary management uk","ocio 3(38) investment manager","how ocios invest in private equity"],"disambiguation":"\"Fiduciary management\" is the usual UK and Dutch name for the same delegated model; UK pensions law defines it.","one_sentence_definition":"An outsourced chief investment officer (OCIO) is a firm an institution appoints to run its investment portfolio with delegated discretion, implementing asset allocation, hiring and replacing managers and rebalancing, under policies the institution's board still sets.","plain_english":"Many institutions are too small to employ a full investment team but too complex to invest passively. Instead of only taking advice and making every decision at board meetings, they hand day-to-day investment decisions to an OCIO. The board keeps responsibility for objectives and the risk budget, and for choosing and monitoring the OCIO.","parent_concepts":[],"child_concepts":[],"related_concepts":["investment-consultant","cio","fiduciary-duty","erisa","investment-policy-statement","manager-selection","fund-of-funds-fof","endowment","foundation","pension-fund"],"comparison_concepts":[],"not_the_same_as":[{"slug":"investment-consultant","distinction":"A consultant advises and the client decides; an OCIO decides and implements within delegated limits."},{"slug":"fund-of-funds-fof","distinction":"A fund of funds is a pooled product open to many investors; an OCIO mandate is a client-specific delegation that may use such products."},{"slug":"cio","distinction":"A CIO is an internal role inside the institution; an OCIO is an external firm performing that role under contract."}],"formula_ids":[],"worked_examples":[],"sections":[{"heading":"Advice versus delegated discretion","paragraphs":["Outsourcing sits on a spectrum. A non-discretionary [investment consultant](/glossary/investment-consultant) recommends; the client's committee decides every hire, fire and rebalance. An OCIO with **partial discretion** runs one part of the portfolio, often the private-markets programme or the return-seeking assets. An OCIO with **full discretion** implements the whole portfolio within the client's [investment policy statement](/glossary/investment-policy-statement), and the committee reviews results and policy rather than individual managers.","The investment management agreement and the policy statement set the boundary: who sets strategic allocation, how far the OCIO may deviate from it, which decisions need client approval, and how performance is measured (usually against a [policy benchmark](/glossary/policy-benchmark))."]},{"heading":"Jurisdiction and status","paragraphs":["**US.** A firm that, for compensation, is in the business of advising others about securities is an investment adviser under Advisers Act section 202(a)(11), so a US OCIO is generally an investment adviser: it registers with the SEC or with its home state unless an exemption applies (filing Form ADV either way), and it owes its clients a federal fiduciary duty. For a private-sector plan governed by [ERISA](/glossary/erisa), an OCIO with discretion over plan assets can be appointed as an ERISA section 3(38) investment manager: a fiduciary with power to manage, acquire or dispose of plan assets that is registered as an investment adviser under the Advisers Act (or, in certain cases, under state law), a bank as defined in that Act, or an insurance company qualified to manage plan assets under the laws of more than one State, and that has acknowledged in writing that it is a fiduciary with respect to the plan. A non-discretionary adviser can also be a fiduciary under section 3(21)(A)(ii) to the extent it renders investment advice for a fee. This page does not describe the duties that remain with the fiduciaries who appoint an investment manager.","**UK.** Since 1 October 2022, pensions regulations define fiduciary management services as managing scheme assets where the same firm, a connected firm or a joint-venture partner also advises the trustees. Trustees of relevant trust schemes (occupational pension schemes set up under trust, excluding relevant small schemes, executive pension schemes and certain others) must carry out a qualifying tender process (inviting, and using reasonable endeavours to obtain, bids from at least three providers that are not connected to each other) before appointing an in-scope fiduciary manager or increasing the assets one manages, where the scheme does not already meet, but would then meet, the asset management threshold of 20% or more of in-scope scheme assets managed by in-scope fiduciary managers; trustees that are public contracting authorities follow a modified version of the rule. Transitional duties in paragraphs 6 and 7 of the Schedule cover schemes that already met that threshold, or the conditions carried over from the 2019 Order, before 1 October 2022 through fiduciary management arrangements that had not been competitively tendered: they must tender those arrangements by the deadline in paragraph 7(4). For schemes meeting the 2019 Order conditions in paragraph 6(2), that deadline is the commencement date where their Order period had already ended, and otherwise five years after the earliest such arrangement. For other schemes it is five years after the earliest such arrangement or, where that five-year period ended before commencement or ends within two years of it, the end of the two-year transition period (30 September 2024); for their arrangements first made between October 2021 and September 2022 the deadline therefore falls in 2026–27. Paragraph 7(2) excepts a scheme that is below the threshold and will not meet it at the deadline, arrangements bought under public procurement rules, and providers that are leaving. The rules came from the Competition and Markets Authority's 2019 market investigation order."]},{"heading":"Who uses OCIOs and why","paragraphs":["OCIO clients are typically institutions with long-horizon portfolios but limited internal staff: [endowments](/glossary/endowment), [foundations](/glossary/foundation), defined benefit [pension funds](/glossary/pension-fund) (including frozen corporate plans on a de-risking path), health-system and insurance portfolios, and family-office-sponsored charities. The usual reasons are governance capacity (committees meet a few times a year; markets do not wait), implementation speed, and access to a manager research platform the institution could not build alone."]},{"heading":"Private markets under an OCIO","paragraphs":["OCIOs reach private funds in two ways. Some commit in each client's name, so every client is a separate LP of record and keeps its fund interests if the OCIO is replaced. Others pool clients into commingled vehicles or funds of funds that the OCIO sponsors, so the vehicle is the LP and a terminated client must keep, transfer or sell its interest in the vehicle. Pacing, vintage diversification and liquidity are planned per client.","For a fund manager, one OCIO research decision can lead to commitments from many clients, which makes OCIOs significant gatekeepers. For the client, the main diligence points are the all-in cost (the OCIO fee sits on top of underlying manager fees), the use of the OCIO's own proprietary funds, and whether reporting shows the reasons for manager changes as well as results."]}],"classification_rules":["Classify an OCIO as an intermediary; record the asset owner as the allocator and link the OCIO through a manager or adviser relationship.","When the OCIO's pooled vehicle is the LP of record, record the vehicle as LP and relate it to the OCIO and, where disclosed, to its client investors.","Record the level of discretion (partial, full) and the asset sleeves covered for each client relationship."],"calculation_rules":[],"common_mistakes":["Recording the OCIO as the LP when commitments are made in each client's name. The client is the investor; the OCIO is its manager.","Assuming delegation transfers all responsibility. Under the OCIO model the board keeps responsibility for objectives and for selecting and monitoring the OCIO.","Comparing OCIO fees without the underlying manager fees and fund expenses.","Treating \"fiduciary management\" (UK) and \"OCIO\" (US) as unrelated services. They describe largely the same delegated model under different legal regimes."],"edge_cases":["An OCIO may run only the private-markets sleeve while a separate consultant advises on the rest of the portfolio.","An adviser can move from consultant to OCIO for the same client; the change in discretion changes its fiduciary role.","When an OCIO is replaced, fund interests held in its pooled vehicles do not move automatically; they may need a transfer or a secondary sale."],"external_standard_mappings":[],"source_ids":["SRC-UK-LEG-SI-1996-1715","SRC-UK-LEG-SI-2022-825","SRC-US-SEC-FORM-ADV","SRC-US-SEC-OCIE-PENSION-CONSULTANTS-2005","SRC-US-SEC-REL-IA-5248","SRC-US-USC-15-80B-2","SRC-US-USC-15-80B-3","SRC-US-USC-15-80B-3A","SRC-US-USC-29-1002"],"citations":[{"source_id":"SRC-US-USC-29-1002","pinpoint":"ERISA sec. 3(21)(A)(i)-(ii), 3(38)(A)-(C)","supports":"Fiduciary definition (discretion; investment advice for a fee) and investment manager definition: RIA (or state-registered adviser filing with DOL), bank or insurer qualified in more than one State, written fiduciary acknowledgment","source":{"source_id":"SRC-US-USC-29-1002","title":"29 U.S.C. 1002 - Definitions (ERISA sec. 3, incl. 3(34), 3(35), 3(42))","publisher":"U.S. Congress (United States Code; LII mirror)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/29/1002","publication_date":"Current US Code text as published by LII (accessed 2026-10-01); para. (42) added by Pub. L. 109-280, sec. 611(f) (2006)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-SEC-OCIE-PENSION-CONSULTANTS-2005","pinpoint":"p.1 n.2","supports":"Advising on selection or retention of investment managers is investment advice under Advisers Act sec. 202(a)(11)","source":{"source_id":"SRC-US-SEC-OCIE-PENSION-CONSULTANTS-2005","title":"Staff Report Concerning Examinations of Select Pension Consultants","publisher":"U.S. Securities and Exchange Commission, Office of Compliance Inspections and Examinations (staff)","document_type":"report","url":"https://www.sec.gov/news/studies/pensionexamstudy.pdf","publication_date":"2005-05-16","jurisdiction":"US","status":"historical staff report","last_verified":"2026-10-01"}},{"source_id":"SRC-US-SEC-REL-IA-5248","pinpoint":"p. 2 (Introduction); Sec. II","supports":"Investment advisers' federal fiduciary duty","source":{"source_id":"SRC-US-SEC-REL-IA-5248","title":"Commission Interpretation Regarding Standard of Conduct for Investment Advisers, Release No. IA-5248","publisher":"U.S. Securities and Exchange Commission","document_type":"release","url":"https://www.sec.gov/files/rules/interp/2019/ia-5248.pdf","publication_date":"Dated 2019-06-05; effective 2019-07-12 (File No. S7-07-18; 17 CFR Part 276)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-SEC-FORM-ADV","pinpoint":"Form ADV cover and index","supports":"Form ADV filing by registered advisers","source":{"source_id":"SRC-US-SEC-FORM-ADV","title":"Form ADV (Uniform Application for Investment Adviser Registration and Report by Exempt Reporting Advisers) - SEC form cover and index","publisher":"U.S. Securities and Exchange Commission","document_type":"form","url":"https://www.sec.gov/about/forms/formadv.pdf","publication_date":"OMB No. 3235-0049; expires 2027-07-31","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-UK-LEG-SI-2022-825","pinpoint":"Reg. 1(2) (commencement); inserted Schedule paras 3(3)-(8), 4, 5(1), 7(1), 7(4); Explanatory Note","supports":"Fiduciary management definition, 20% threshold, three-bid qualifying tender, deadline for continuing arrangements, in force 1 Oct 2022, CMA 2019 order origin","source":{"source_id":"SRC-UK-LEG-SI-2022-825","title":"The Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022 (SI 2022/825)","publisher":"UK Government (legislation.gov.uk)","document_type":"regulation","url":"https://www.legislation.gov.uk/uksi/2022/825/made","publication_date":"Made 2022-07-15; in force 2022-10-01","jurisdiction":"UK","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-UK-LEG-SI-1996-1715","pinpoint":"Reg. 30 (scope: relevant trust schemes and exclusions); Schedule para 3","supports":"Schemes to which the fiduciary management duties apply","source":{"source_id":"SRC-UK-LEG-SI-1996-1715","title":"The Occupational Pension Schemes (Scheme Administration) Regulations 1996 (SI 1996/1715), Part 6 (investment consultancy and fiduciary management) and Schedule, as inserted by SI 2022/825","publisher":"UK Government (legislation.gov.uk)","document_type":"regulation","url":"https://www.legislation.gov.uk/uksi/1996/1715/part/6","publication_date":"Revised text on legislation.gov.uk, accessed 2026-10-02 (Part 6 inserted with effect from 2022-10-01)","jurisdiction":"UK","status":"in force","last_verified":"2026-10-02"}},{"source_id":"SRC-US-USC-15-80B-2","pinpoint":"Advisers Act sec. 202(a)(11)","supports":"Investment adviser definition","source":{"source_id":"SRC-US-USC-15-80B-2","title":"15 U.S.C. 80b-2 - Definitions (Advisers Act s.202)","publisher":"U.S. Congress (US Code via LII)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80b-2","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-USC-15-80B-3","pinpoint":"Advisers Act sec. 203(a)","supports":"SEC registration, subject to exemptions","source":{"source_id":"SRC-US-USC-15-80B-3","title":"15 U.S.C. 80b-3 - Registration of investment advisers (Advisers Act sec. 203, incl. 203(l) and 203(m))","publisher":"U.S. Congress (United States Code; LII mirror)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80b-3","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}},{"source_id":"SRC-US-USC-15-80B-3A","pinpoint":"Advisers Act sec. 203A(a)(1)-(2)","supports":"State versus SEC registration","source":{"source_id":"SRC-US-USC-15-80B-3A","title":"15 U.S.C. 80b-3a - State and Federal responsibilities (Advisers Act s.203A)","publisher":"U.S. Congress (US Code via LII)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80b-3a","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}}],"faq":[{"q":"What is the difference between an OCIO and an investment consultant?","a":"Discretion. A consultant recommends and the client's committee decides; an OCIO makes and implements investment decisions within limits the client sets."},{"q":"Is an OCIO a fiduciary?","a":"In the US an OCIO is generally an investment adviser and owes clients a federal fiduciary duty; for ERISA plans an OCIO with discretion can be appointed as a section 3(38) investment manager, a status that requires a written acknowledgment that it is a plan fiduciary."}],"seo":{},"first_published":null,"last_reviewed":"2026-10-02","last_modified":"2026-10-02","content_version":"2.0.0","url":"https://altss.com/glossary/ocio","json_url":"https://altss.com/reference/concepts/ocio.json","title":"Outsourced Chief Investment Officer (OCIO)","formulas":[],"sources":[{"source_id":"SRC-UK-LEG-SI-1996-1715","title":"The Occupational Pension Schemes (Scheme Administration) Regulations 1996 (SI 1996/1715), Part 6 (investment consultancy and fiduciary management) and Schedule, as inserted by SI 2022/825","publisher":"UK Government (legislation.gov.uk)","document_type":"regulation","url":"https://www.legislation.gov.uk/uksi/1996/1715/part/6","publication_date":"Revised text on legislation.gov.uk, accessed 2026-10-02 (Part 6 inserted with effect from 2022-10-01)","jurisdiction":"UK","status":"in force","last_verified":"2026-10-02"},{"source_id":"SRC-UK-LEG-SI-2022-825","title":"The Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022 (SI 2022/825)","publisher":"UK Government (legislation.gov.uk)","document_type":"regulation","url":"https://www.legislation.gov.uk/uksi/2022/825/made","publication_date":"Made 2022-07-15; in force 2022-10-01","jurisdiction":"UK","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-SEC-FORM-ADV","title":"Form ADV (Uniform Application for Investment Adviser Registration and Report by Exempt Reporting Advisers) - SEC form cover and index","publisher":"U.S. Securities and Exchange Commission","document_type":"form","url":"https://www.sec.gov/about/forms/formadv.pdf","publication_date":"OMB No. 3235-0049; expires 2027-07-31","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-SEC-OCIE-PENSION-CONSULTANTS-2005","title":"Staff Report Concerning Examinations of Select Pension Consultants","publisher":"U.S. Securities and Exchange Commission, Office of Compliance Inspections and Examinations (staff)","document_type":"report","url":"https://www.sec.gov/news/studies/pensionexamstudy.pdf","publication_date":"2005-05-16","jurisdiction":"US","status":"historical staff report","last_verified":"2026-10-01"},{"source_id":"SRC-US-SEC-REL-IA-5248","title":"Commission Interpretation Regarding Standard of Conduct for Investment Advisers, Release No. IA-5248","publisher":"U.S. Securities and Exchange Commission","document_type":"release","url":"https://www.sec.gov/files/rules/interp/2019/ia-5248.pdf","publication_date":"Dated 2019-06-05; effective 2019-07-12 (File No. S7-07-18; 17 CFR Part 276)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-USC-15-80B-2","title":"15 U.S.C. 80b-2 - Definitions (Advisers Act s.202)","publisher":"U.S. Congress (US Code via LII)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80b-2","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-USC-15-80B-3","title":"15 U.S.C. 80b-3 - Registration of investment advisers (Advisers Act sec. 203, incl. 203(l) and 203(m))","publisher":"U.S. Congress (United States Code; LII mirror)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80b-3","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-USC-15-80B-3A","title":"15 U.S.C. 80b-3a - State and Federal responsibilities (Advisers Act s.203A)","publisher":"U.S. Congress (US Code via LII)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/15/80b-3a","publication_date":"Current US Code text as published by LII (accessed 2026-10-01)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"},{"source_id":"SRC-US-USC-29-1002","title":"29 U.S.C. 1002 - Definitions (ERISA sec. 3, incl. 3(34), 3(35), 3(42))","publisher":"U.S. Congress (United States Code; LII mirror)","document_type":"statute","url":"https://www.law.cornell.edu/uscode/text/29/1002","publication_date":"Current US Code text as published by LII (accessed 2026-10-01); para. (42) added by Pub. L. 109-280, sec. 611(f) (2006)","jurisdiction":"US","status":"in force","last_verified":"2026-10-01"}]}