A Chief Investment Officer (CIO) is an experienced investment professional that is normally supported by a fully-staffed investment department and is point-accountable for the investment success of an entire investment program -- not just stocks or bonds or money market funds or hedge funds or venture capital or commodities, but all investments across the entire program.
Having a qualified Chief Investment Officer, supported by a fully-capable staff, provides a fundamental advantage in terms of both managing risk and achieving net-of-all-fee returns.
Whether the CIO is a full-time employee of one’s family or institution or an outsourced CIO (OCIO), the professional and moral contract between CIO and client is the same. The CIO (and firm) must have the skill, experience and resources to evaluate and manage assets across every asset class and return source and must be unencumbered by the conflicts-of-interest that have plagued the investment industry for far too long.
The most sophisticated investment programs implement component solutions by allocating capital to independent specialist money managers. This “open architecture” enables investors to use any specialist manager, anywhere in the world and reduces conflicts-of-interest.
Not only does a Chief Investment Officer have the critical task of allocating capital with insight, skill and discipline to control risk and enhance program return, but also just as important is allocating that capital in a manner that responds to the family or institution’s particular fact pattern -- financial risk, operating risk, liquidity requirements and constituency risk. As the first firm to offer outsourced CIO services to serious investors, who chose not to develop and pay for an internal department, Hirtle Callaghan has spent more than 25 years developing powerful proprietary processes for both capital allocation and manager selection. We work in a capacity that is most similar to our clients hiring their own internal staff.
We have written a commentary defining the outsourced CIO space, please contact us if you would like to receive a copy.