Art by Cristian TunderaThe construction of a Buyer's Guide is an inherently frustrating
process. Transparency is the goal, and yet transparency is not
always viewed as the friend of growing or shrinking
businesses—especially ones as competitive as investment
outsourcing firms. These businesses, rightly so, want to put
their best face forward—but this often can mean that
less-than-stellar data is conveniently unreported. Frustrating,
indeed.
With that said, we'd like to thank all the firms that made an
honest effort toward providing data this year. More so than last
year, many of the firms included in this list were willing to share
their successes and failures in numerical form. Why this is,
we're not sure—but we hope it bodes well for the future of this
growing industry, and for our sanity.
But we have miles to go before we sleep (to paraphrase Robert
Frost—although he probably wasn't referring to investment
outsourcing when he penned his famous poem). Consider this
list the second mile in a journey of undetermined length. After all, we have promises to keep. Or something
like that.
Methodology
Building on experience from a year's worth of data collection, our aim was to make the 2013 Guide simpler,
yet at the same time more relevant to users and potential users of investment outsourcing—discretionary
outsourcing in particular. To that end, we condensed the questionnaire from 33 questions down to 12 this
year, and have presented the vendors in what we believe to be a vastly improved format. To collect the
data, we sent a web link to a total of 83 known or suspected investment outsourcers (discretionary and
non-discretionary), and ended up with 29 providers (four more than in 2012) that are both a) in the
Outsourced CIO (OCIO) business, and b) willing/able to disclose certain aspects of their OCIO assets and
clients. We were quite strict in our definition of discretionary outsourcing: For the purposes of this Guide,
we have defined it as an instance where the "outsourcing manager has full discretion to select and replace
managers without prior client approval." A few managers balked—pointing out that investment outsourcing
is not just about the hiring and firing of managers. While we do not necessarily disagree, the purpose of
our Guide is to be simply a starting point for a conversation about the nuances of a particular vendor's
offering.