Strategic Investment Solutions Merges into Verus

Consultancy and outsourced-CIO (OCIO) provider Verus Advisory has agreed to merge with San Franscisco-based Strategic Investment Solutions (SIS), uniting under the Verus brand.

The combined firms’ client assets will top $380 billion—the bulk of it in traditional consulting mandates, not discretionary management—according to company documents.

The firms are merging in order to more effectively compete with other consulting and OCIO providers, said Verus CEO Jeffrey MacLean in a release.

No layoffs or departures are anticipated as a result of the merger. SIS CEO Barry Dennis will serve as a managing director at Verus, the firms said.

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“SIS clients have been aware of our search for a partner that allows us to maintain superior, customized client service and to plan for my eventual succession,” Dennis said.

Verus, rebranded from Wurts & Associates in April, manages $21 billion in outsourced capital, and advises on $90 billion as a consultant, according to figures Verus published in July.

The firm’s clients include Delta, which recently chose the firm as an OCIO partner alongside UBS Asset Management for its multi-billion dollar pension.

SIS, based in San Francisco, brings with it advisory relationships on $267 billion in pension, nonprofit, and family office assets.

OCIO services are more in demand than ever, according to a report earlier this year by Cerulli Associates, but the field is also becoming more competitive.

According to the report, investor demand for comprehensive services at a low cost has put pressure on new and less-resourced entrants to the OCIO industry, with the result of an “eventual shake-out or consolidation.”

In April, Goldman Sachs Asset Management agreed to purchase OCIO provider Pacific Global Advisors from Pacific Life Insurance Company. Pacific Global Advisors, which specialized in corporate pensions, had full discretion of over $2.84 billion in retirement assets, according to the 2015 Chief Investment Officer OCIO Buyer’s Guide.

Future Fund, Australia’s A$117.8 billion (US$85 billion) sovereign wealth fund, has hired Björn Kvarnskog to lead its equity investments.

Kvarnskog will take up his role in early 2016, the fund announced today. He joins from AP4 in Sweden, where he oversaw a SEK123 billion ($14.8 billion) global equities portfolio. He has also worked at AP3 as a portfolio manager, and at asset managers DnB NOR and Alfred Berg.

“Bringing together different investment perspectives is enormously important to how we run the portfolio and Björn will be a great addition to our thinking,” said Raphael Arndt, Future Fund CIO. He added that Kvarnskog had “extensive experience in long-term investing and leadership”.

Sarah Carne, acting head of equities at Future Fund, will continue in this role until Kvarnskog takes up his new position in the New Year. Future Fund’s equities allocation was valued at A$39 billion, roughly a third of the overall portfolio.

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Arndt was appointed CIO in September 2015, succeeding David Neal. Wendy Norris was appointed head of the fund’s infrastructure team in March this year, overseeing roughly A$9 billion.

Arndt was ranked #16 in CIO’s latest Power 100 list of asset owners, published yesterday. AP4 CEO Mats Andersson was ranked #49.