Ultimus (formerly Gemini) was recently featured on Hedgeweek.com‘s 2018 special report on Managed Account Platforms.
In an environment of fund fee compression, leveraging a private managed account platform may offer an easier way for an outsourced chief investment officer (OCIO) to get approval from pension fund investment committees.
The traditional consultant model has been non-discretionary, where the consultant makes investment suggestions to the pension plan board, which then makes a collective decision. Now, the consultant community is pivoting to act as the OCIO as institutions look to reduce pressure on internal resources and deal with the complexity of generating sufficient returns to meet their long-term liabilities.
The growth opportunity in this space is clear, with OCIO-managed institutional assets having risen 23 percent to USD1.74 trillion according to Pension & Investments’ money manager survey.
This is playing very much to the advantage of platform providers such as Gemini, which operates an open architecture environment that facilitates the creation of Dedicated Managed Accounts (DMAs) for large institutions.
By utilising this type of solution – which is essentially an ecosystem that is owned and controlled by a single institutional investor – an OCIO manager can closely monitor underlying managers on a regular basis. More importantly, the solution provides tangible cost reductions; something any investment committee notices.
“An OCIO realises they have the ability to structure something more beneficial to the pension’s participants. They can aggregate all of their operations and also reduce costs, which ultimately augments the pension’s underlying investment pool,” comments David Young, President of Gemini…