We see many benefits of OCIO for pension schemes, trustees, sponsors, and members. Firstly, efficiency-- the investment and regulatory landscape is constantly changing. And this creates more work for trustees. We believe an OCIO provider releases this pressure. Because when trustees choose to have everything under one roof, investment decisions become more efficient.
Decisions can be made in real time. For example, we were able to act swiftly as OCIO during market volatility in 2022. Our action protected client-funding levels and our trustees weren't pressurized into quick decisions. We acted for them.
Secondly, cost savings-- OCIO clients can benefit from investment managers' economies of scale through the use of in-house funds and also as this scale allows attractive fee negotiations with third parties. At BlackRock, we use passive and factor-based strategies to achieve cost efficiencies only using active strategies where we believe paying for them truly makes sense. And as the world's largest asset manager, we have scale for external manager fee savings. For members, every pound saved is another pound secured for the future.
And thirdly, reducing volatility-- an OCIO focuses on protecting funding level volatility for a scheme in all market environments. To achieve this, an OCIO arrangement is managed through a bespoke governance structure with a level of delegation and discretion to the OCIO set out clearly in legal documentation. Trustees remain responsible for the high level decisions, maintaining efficient and clear control of their scheme whilst delegating day-to-day implementation to the OCIO. This focus means there is reduced likelihood of trustees calling on their sponsors for unexpected events as volatility has been effectively managed.
Risk Warnings
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed.
Investors may not get back the amount originally invested.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration
when selecting a product or strategy.
Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase.
Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall
suddenly and substantially. Levels and basis of taxation may change from time to time.
Important Information
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