The Outsourced Chief Investment Officer (OCIO)
When to build an internal investment team versus hiring an OCIO firm.
The AUM Threshold
Hiring a high-quality, full-time CIO will cost between $500k to $1M+ annually, plus carry/bonus. If the family's AUM is $150M, an internal CIO consumes nearly 66 basis points just in salary. This is mathematically inefficient. See our benchmark data.
The OCIO Model
For families under $250M - $300M, an OCIO model (paying a firm 20-40 bps to manage the allocation) is usually the optimal choice, allowing the family office staff to focus on tax, estate, and operations.
| Metric | Internal CIO | OCIO Firm |
|---|---|---|
| Cost Structure | Fixed (High Salaries) | Variable (Bps on AUM) |
| Deal Flow | Limited to CIO's network | Institutional scale access |
| Alignment | 100% focused on family | Fractional attention (manages multiple clients) |
Common Mistakes
Hiring an OCIO that primarily allocates to their own proprietary funds (double-dipping fees) rather than acting as a true open-architecture fiduciary.
Run the math using our OCIO vs. In-House Calculator.
Take the Next Step
Model your specific requirements using our interactive operational and setup tools.
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