Q: You mentioned governance. Can you elaborate on how an OCIO improves governance for asset owners?
Bryan Ward: Absolutely. Many organizations struggle with governance — whether due to limited staff, infrequent investment committee meetings, or a lack of in-house expertise. An OCIO provides continuous oversight and decision-making, which helps reduce delays and missed opportunities.
We also assume a level of fiduciary responsibility, which can help protect investment committees from potential litigation. That’s a big deal, especially for organizations with complex portfolios or regulatory exposure. Our role is to act as an extension of the client’s team, bringing discipline, documentation, and accountability to the investment process.
I’ve mentioned this in the past, the decision by an asset-owner to engage an OCIO is first and foremost a governance decision. How best will the portfolio’s
objectives be achieved? Managed internally or externally via an OCIO? Do not allow the limitations of the current governance model dictate the complexity of the portfolio strategy. Determine the optimal portfolio based on the needs and objectives of the organization, then determine the optimal governance model required to achieve them.
Q: Let’s talk about portfolio construction. How does an OCIO help asset owners build more diverse portfolios, particularly with alternative assets?
Bryan Ward: This is one of the most compelling reasons to hire an OCIO. Alternative assets — like private equity, private credit, hedge funds, real estate, and infrastructure — offer diversification and the potential for higher returns. But they’re also complex. They require specialized knowledge, operational infrastructure, and access to top-tier managers.
Most organizations don’t have the internal resources to evaluate, select, and monitor these investments effectively. That’s where we come in. At Aon, we have a global research platform and deep relationships with alternative asset managers. We can help clients build customized portfolios that include alternatives in a way that aligns with their risk tolerance, liquidity needs, and long-term goals. The specific type of alternative investments and size of the allocations varies a lot by client circumstance, especially the need for liquidity, so some clients focus only on the more liquid strategies while other incorporate the broader universe.
Q: Are you seeing increased demand for alternatives among your OCIO clients?
Bryan Ward: Definitely. According to research from the Chartered Alternative Investment Analyst Association, alternatives have grown from 6% of the global market in 20042 to 15% by the end of 20233, and we think it is poised to grow further. That growth is being driven by
institutional investors who are looking for ways to enhance returns and reduce reliance on traditional equity and fixed income, especially today, as valuations in public equities appear stretched.
We’re helping clients tap into that opportunity. For example, we recently worked with asset owners to introduce diversified alternatives sleeves that included private credit and infrastructure, among other strategies. It may help them improve their expected returns while managing downside risk.
Q: What are some of the operational challenges asset owners face when trying to invest in alternatives on their own?
Bryan Ward: There are several. First, sourcing and vetting managers is time-consuming and requires deep due diligence. Second, the operational demands — like capital calls, performance reporting, and legal reviews — are significant. Third, many alternative strategies are illiquid, so you need to manage cash flows carefully.
An OCIO can handle all of that. We have dedicated teams for operational due diligence, legal contracting, fee negotiation, and performance analytics.4 We also help clients model liquidity and stress-test their portfolios. That’s a level of support that’s hard to replicate internally unless you’re a very large institution.
Q: How do you tailor OCIO solutions to different types of asset owners?
Bryan Ward: Every client is different. A university endowment has different goals and constraints than a corporate pension plan or a healthcare foundation. That’s why we start with a deep discovery process — understanding the client’s mission, liabilities, spending needs, risk tolerance, and governance structure.
From there, we build a customized investment strategy. That might include a dynamic glide path for a pension plan, or a mission-aligned responsible investing strategy for a foundation. We also offer different levels of delegation — from partial to full OCIO — depending on the client’s preferences.
