TinaShe Tande
Hello and welcome to today’s video where we will be discussing Family Offices and the role of an Outsourced Chief Investment Officer, or “OCIO” as it is known for short. My name is TinaShe Tande, and I am part of the UK Institutional Client Business here at BlackRock, with a focus on ETF solutions.
With me, I’m thrilled to be joined by two of my colleagues who are deeply passionate about this subject. First, we have Vicky Matthews, Head of our Family Offices, Endowments & Foundations business, and Scott Harris, the EMEA OCIO lead for Family Offices, Endowments, Foundations & Insurers. Welcome, Vicky, and welcome, Scott.
In today’s discussion we will be unpacking the key trends we are seeing across the Family Office space, why Family Offices are turning to BlackRock as a partner and how an OCIO might be the right solution for them. So without further ado, let’s dive straight in.
Scott, let’s start with you. Could you give us some insight into what exactly an OCIO is and what BlackRock brings to the table in this area?
Scott Harris
An ‘Outsourced Chief Investment Officer’ or OCIO is where an external investment manager works with a client to build a bespoke portfolio. OCIOs work with clients to set and manage an asset allocation - adjusting tactical positioning, selecting products and providing daily risk management and oversight. This allows a client’s portfolio to respond quickly to changing market opportunities and risks, and ultimately to adapt to the client’s needs over time.
At BlackRock, when we build an OCIO relationship we work with our clients to establish their investment objectives, risk appetite, cash needs, any investment bias or investment exclusions a client may want considered, and any other objectives for the portfolio. We design and implement bespoke discretionary mandates that are either multi-asset or single asset class and that blend the best of BlackRock investment capabilities and third-party managers. We then agree with our clients how much discretion they would like to retain and how much they want to delegate to BlackRock.
TinaShe
Thanks Scott. So now we know what an OCIO is, I'd like to turn to family offices. Vicky, how is BlackRock partnering with Family Offices to help them achieve their investment objectives?
Victoria Matthews
BlackRock has been partnering with family offices for decades and we have one of the largest dedicated family office teams globally, providing tailored access to BlackRock’s extensive investment platform.
Every family office, and the family they serve, is unique, with diverse and complex needs. Our aim is to act as an extension of their in-house investment team, connecting them to the best of our insights and expert thinking, and giving them access to investment opportunities that were previously reserved only for the world’s largest institutions.
BlackRock is uniquely placed because we cover every asset class, so we can help with everything investment-related including cash management, cost-efficient index and ETF solutions, liquid and private market investment strategies, risk management and technology solutions.
One of the things our clients really value, particularly as they are looking to get the next generation of the family involved in decision making, is our BlackRock Education Academies, which provides topic-specific learning modules on things like portfolio construction and mega themes such as the energy transition. The next generation find this very helpful in empowering them with the information and knowledge that they might not otherwise have and ultimately this means they are better positioned to ask the right questions which is critical.
Ultimately, our family office clients are looking to preserve and grow the wealth of the family, and the strategies they deploy to achieve this are somewhat different from pension or insurance clients, so it is my job to provide curated access to the best of BlackRock’s platform.
TinaShe
And Vicky staying with you, what are some of the key trends that we are seeing within the family office space?
Victoria Matthews
There are a few things I would highlight:
At the portfolio level, liquidity is top of mind for family offices, allowing them to take advantage of opportunities that emerge from the heightened market volatility and potential dislocations. ETFs, Private Equity secondary strategies and co-investments have been the preferred strategies by our clients to improve the liquidity profile of their portfolios.
At the strategy level, we are seeing renewed interest in hedge funds - which is quite a change from last year - and continued appetite for private equity, particularly growth equity. Thematic investing is also rising in prominence, with family offices increasingly focused on driving impact in areas that are a focus to them, without sacrificing returns in the process. Such areas include emerging technologies, healthcare and digital assets.
More broadly, an increasing number of single family offices are acknowledging that they don’t have the resources internally to cover all asset classes proficiently or the relationships to access the best managers, so are looking for external help to help bridge the gaps.
This is just one of the unique insights that we uncovered through our annual family office survey which deep dives into how our family office clients are positioned and what their priorities are, and we host a number of family office specific events which are designed to help our clients make better informed decisions, exchange ideas and build connections with their peers.
Time for one last question, so finally Scott can you share why family offices are coming to BlackRock for OCIO? - TinaShe
Scott Harris
BlackRock has been managing OCIO portfolios since 2004, and we believe we are uniquely placed to serve family office clients. Today BLK has over 40 family office OCIO mandates globally and we are seeing an increase in the demand for our OCIO services.* Key reasons why family offices are considering our OCIO services include access to institutional quality investments and risk management, cost considerations, succession planning, benchmarking and generational wealth transfer.
Partnering with an asset manager such as BlackRock for our OCIO services offers clients many benefits.
OCIO clients gain access to world leading investment and risk management expertise (be that access to single asset classes, portfolio construction or Aladdin, our risk management technology).
We offer both open and closed architecture solutions that leverages our150-person research team, who are doing due diligence on BLK and third-party funds.
We offer dictated specialised teams including a CIO, a specialist like me designing the best of BLK OCIO, a client service officer and of course the client’s Relationship Manager.
Our clients, can gain access to significant cost savings on manager fees
And finally, our OCIO clients see us as a long-term trusted partner, supporting them with investment knowledge transfer or succession planning and generational wealth transfer.
TinaShe Tande
Thank you Vicky and thank you Scott for your contributions to the discussion today. I certainly found it interesting and I really hope that those listening did too.
If you would like to learn more about how BlackRock are partnering with Family Offices for OCIO, please contact your BlackRock relationship manager or get in touch via the website, and we would be delighted to assist you along the way.
With that, thank you.
