US Foundation Joins OCIO Trend

The Skillman Foundation has become the latest US foundation to outsource its investment capabilities to a dedicated outsourced chief investment officer (OCIO).

The foundation, based in Detroit, Michigan, has hired Investure to manage its $500 million portfolio. The Virginia-based OCIO firm officially took over in September.

A statement from the Skillman Foundation said its current CFO Richard Connell would continue to work with Investure to the end of November, and a permanent CFO and vice president of operations would be appointed next month.

The foundation was established in 1960 and is aimed at improving graduation rates in the city of Detroit.

Investure runs roughly $11 billion on behalf of endowments and foundations, and was one of the first firms in the US to be dedicated to the OCIO model. It was established in 2003 by co-founders Chas Cocke, Alice Handy, and Hance West.

Investure’s US clients include the Edna McConnell Clark Foundation, the Carnegie Endowment for International Peace, Barnard College, Smith College, and the Commonwealth Fund.

OCIO is seen as a preferable option for smaller endowments, foundations, and other portfolios when looking to reduce costs. A CIO industry poll in June saw opinion split between asset owners and other industry experts as to whether OCIO was an emerging trend or just a passing fad.

In the US, Wake Forest University launched its own OCIO model based on the portfolio and process run by its CIO Jim Dunn. George Washington University is in the process of outsourcing the management of its endowment, and in Europe the Finnish Cultural Foundation awarded an outsourced mandate to eQ Asset Management in September.

But other sources indicate OCIO is not being seen as the only option. A survey of endowments and foundations in July showed many were actually reducing their reliance on OCIOs.

Related Content: 2014 OCIO Survey & The Many Tensions of Outsourcing