The outsourced Chief Investment Officer (“OCIO“) model is growing rapidly, with U.S. assets expected to reach $4.2 trillion by 2028. Leading the growth in the OCIO industry are endowments, foundations, and healthcare organizations. As more Investment Committees explore the OCIO model, many fiduciaries default to a familiar formula: a formal OCIO search process with a Request for Proposal (“RFP“). The process appears structured and diligent, but in practice, the traditional RFP can be slow, rigid, and overly focused on checking boxes. An RFP often misses the very qualities that define a successful long-term OCIO relationship. In this article, we explore when an RFP can be helpful, where it falls short, and how a better process can deliver more value with less friction.
What is an OCIO RFP and Why is it Common?
An OCIO RFP is a formal document that institutions use to solicit responses from outsourced Chief Investment Officer providers. At its core, the document is meant to create a structured and objective data set for evaluating potential partners. It typically accomplishes this by asking detailed questions about investment process, performance, fees, services, team structure, and reporting. RFPs vary in complexity and the level of detail requested. We have seen examples with thirty questions and others with more than a hundred questions.
RFPs are common because, for many institutions, the search process begins with a blank slate. Most members of the board only review the market occasionally and therefore lack current, comparable data on providers. The RFP is an obvious way to fill that gap. It also checks important procedural boxes like creating a paper trail and documenting due diligence. In some sectors, particularly retirement plans governed by ERISA and Department of Labor guidelines, issuing a questionnaire is standard practice to help committees fulfill their fiduciary responsibility. Endowments, foundations, and healthcare operating assets — which collectively represent a growing share of OCIO clients — aren’t bound by the same regulatory requirements. Non-profits seeking OCIOs to manage long-term portfolios typically have far more flexibility.
A typical OCIO RFP process starts with a questionnaire and a working list of OCIO providers. Once an Investment Committee decides to run a search, it often dives right in. There are plenty of RFP templates online, including from OCIO firms (Verger has a good one here) and public entities with a transparent procurement process. Rather than starting from scratch, many organizations try to save time by adapting existing questionnaires. Provider lists are often built through committee networks, inbound firm outreaches, or targeted reviews of OCIO databases or lists. The intent is to create a structured, comparative data set on investment advisers in order to facilitate a decision. But there are hidden costs.
The Hidden Costs of the Traditional OCIO RFP Process
The traditional process often causes friction for both Investment Committees and OCIO providers. Committees often include too many providers, hoping to use the RFP to narrow the field to qualified candidates. While this is understandable, adding candidates means adding a significant amount of extra information to process. The sheer amount of time required to draft, distribute, respond to, and evaluate lengthy responses is significant for all parties involved. For volunteer boards that are already stretched thin, the process can feel like a paperwork marathon that delays rather than drives decision-making. And OCIOs risk spending a lot of time preparing proposals for organizations that don’t fit their capabilities.
The questionnaire also tends to emphasize what’s easily measured: assets under management, past performance, fee schedules, lists of services, and potential conflicts of interest. RFPs can start to resemble an “everything but the kitchen sink approach” as questions get added but few get deleted. Committees don’t often think through what information is most helpful to make the decision, versus what information is background information. Thus, RFPs tend to be long and poorly organized, failing to quickly establish baseline capabilities while allowing Committees to extract actionable information.
This dynamic turns the process into a box-checking exercise to help streamline what is otherwise an intimidating amount of data from a wide range of providers. Which firm answered every question? Which one delivered the best-looking response? Who has the lowest fee? Who has the highest 5-year return? The evaluation naturally tilts toward quantitative data that is easy to compare.
Improve the OCIO RFP
There are ways to make the RFP work harder for you. Here are a few hard-won best practices learned from reading hundreds of responses:
- Consider a search committee. The entire Investment Committee should be involved in setting the objectives and criteria as well as picking a finalist. Leveraging a subcommittee to narrow the funnel from candidates to finalists saves everyone a lot of time.
- Share your Investment Policy Statement. Sharing this document helps the OCIO providers get to know your organization better and customize responses to your needs.
- Scope your RFP questions correctly. Don’t ask for “firmwide” data if you’re only interested in a particular business unit, strategy, or team. Clarity here avoids bloated responses and irrelevant detail. And when requesting structured data (like tables), leave room for nuance. Always include an “Other” or “Comment” column. The best OCIO firms often have good reasons for answering outside the box.
- Define your performance requests carefully. Don’t just ask for track record. Specify whether returns should be net of fees, whether they reflect live client data, and what type of portfolio they refer to. It’s helpful to identify client type, risk level, asset class mix, and whether alternative investments should be included.
- Ask for a performance reporting sample. Make sure the output is helpful to your Committee. Understand what data you receive and how reporting helps you measure progress relative to your goals.
Keep in mind though that an RFP is a rather blunt instrument. A well-aligned investment provider supports your institution’s investment objectives with a shared philosophy on risk management, asset allocation, and the construction of a investment portfolio. A well-designed search process must ask the right questions. It also needs to surface useful information on behavioral dynamics, cultural alignment, investment philosophy, and long-term fit, which is a tall order for a standard RFP.
An OCIO is More than an Investment Firm
Past performance is no guarantee of future results. This is always true in the investment world. A particular small-cap manager may have a great long-term track record that won’t persist into the future. Perhaps a key person left, or the alpha opportunity eroded, or results reflect an outsized benefit from a particular trade (i.e. they got lucky). Even with rigorous analysis, it is difficult to evaluate investment manager culture, incentives, and internal dynamics from the outside. OCIOs and investment consultants spend a great deal of time, energy, and resources evaluating potential investment managers to try to pick tomorrow’s winners.
The challenge is compounded for Investment Committees evaluating OCIO performance and assessing the likelihood of persistence. An OCIO is an investment firm and a governance partner. One of the biggest misconceptions about the OCIO model is that once a Committee outsources investments, the hard work is over. In reality, the Investment Committee remains central to the investment governance structure. Even with full discretion, an OCIO does not act alone. The Committee and OCIO work together to determine the portfolio objectives and develop a long-term investment framework sufficient to achieve them, including the strategic asset allocation. Ultimately, strategic asset allocation is the largest absolute driver of investment returns for diversified portfolios. Establishing this framework requires a strong working relationship between the Committee and OCIO, grounded in trust and a shared investment philosophy.
What Really Matters in Selecting an OCIO
When institutions are asked what drives satisfaction in a long-term OCIO relationship, quantitative information like performance and fees is less often mentioned than the working relationship. Culture, communication, and alignment consistently rank among the top factors mentioned. Unfortunately, these are the very qualities that a traditional proposal struggles to capture. A provider might have excellent historical performance, but friction emerges quickly (especially when performance slips) if there are meaningful differences in philosophy, risk management, and service expectations.
Historical performance and fees do matter, but they’re part of a much broader picture, one that requires qualitative, not just quantitative, evaluation. Institutions don’t just need strong results; they need confidence in how those results are generated. Organizational stability and transparency also play a key role. Can the OCIO team remain consistent over the relationship horizon? Is the firm open about operations, conflicts, and decision-making authority? These factors matter as much for an OCIO as they do to an underlying investment manager.
A Better Way: Expert Guided Process
Selecting an OCIO is a governance decision as much as an investment decision. At Leita, we don’t rely on a traditional RFP. We believe it often falls short of what fiduciaries need to make a confident, long-term decision. While an RFP can surface basic information, it rarely offers meaningful insight into how an OCIO will partner with your Committee over time.
Instead, we’ve designed a process that emphasizes alignment and decision clarity. Leita’s OCIO search approach eliminates the need to wade through lengthy questionnaires or compile baseline data from a dozen providers. We maintain detailed information on a broad set of OCIO firms, including team composition, investment approach, reporting practices, and organizational structure. Committees can begin with a qualified field of candidates rather than a blank slate. It allows Committees to focus time and energy on a deeper evaluation of a narrower set of candidates. Together, we dig deeply into investment philosophy, how firms communicate, how they respond to complexity, and how well their approach fits with your institutional priorities and culture. A strong relationship between an Investment Committee and an OCIO has a direct impact on long-term investment portfolio returns.
Whether managed internally or supported by an OCIO search consultant, an effective OCIO selection process should reflect the significance of the relationship it’s designed to build.
Curious to learn more? Let’s talk.
