The U.S. outsourced chief investment officer (OCIO) industry has more than tripled in size in less than a decade, from just more than $1 trillion in 2015 to greater than $3.3 trillion by year-end 2024.

The rapid growth has made it an attractive industry for many new entrants, including investment consultants, asset managers, banks, and wealth managers. Growth in the industry is expected to continue through 2029, pushing assets to $5.6 trillion, reflecting a 10.6% average annual growth rate, according to The Cerulli Report—U.S. Outsourced Chief Investment Officer Function 2025.

OCIO industry growth is based on three fundamental factors: investment performance, flows at the channel level (i.e., contributions and distributions from the plan or portfolio), and OCIO adoption. OCIO adoption has historically been the strongest driver of growth for the industry and is expected to remain consistent as nearly $1.3 trillion is projected to flow into the OCIO industry over the next five years from institutions adopting the model for the first time or clients in sleeve portfolios expanding their relationships.

Across the industry, corporate defined contribution (DC) plans are expected to lead all institutional channels ($294 billion) in total OCIO flows over the next five years, followed closely by corporate pension plans ($248 billion). The strong adoption rate among corporate defined benefit (DB) plans makes them an attractive client, despite lower projected asset growth.

As OCIO providers focus on their business development strategies, it will be essential to understand the remaining addressable opportunity and volume of organic growth entering the OCIO industry from each channel.

“The industry is in different stages of its lifecycle, depending on the client channel,” says Chris Swansey, associate director. “The portion of the industry focused on serving corporate DB plans is further along in the industry lifecycle than the portion focused on endowments, foundations, and the private wealth segment. Fees are more standardized, assets are more consolidated, and the remaining addressable market is shrinking more rapidly,” he adds.

As this industry segment continues to mature, large firms are likely to focus heavily on the rapidly growing nonprofit and private wealth segments, which will, in turn, accelerate the industry’s maturity in that segment. The implications of this include fee compression, consolidation, and more standardization among providers.

“Looking ahead, competitive dynamics are anticipated to change,” says Swansey. “Larger OCIO providers will likely increase fee pressure on smaller competitors as assets concentrate among the largest providers. If organic growth opportunities eventually decline, large OCIO firms are expected to seek inorganic growth through acquisitions. These developments are poised to reshape the industry’s evolving landscape,” he concludes.

Source: Cerulli