Aon takes on £3.5bn with three new clients for UK outsourced CIO service

Aon has taken on an additional £3.5bn (€4.2bn) in assets under management with three new clients for its outsourced chief investment officer (OCIO) service in the UK.

Two of the new clients are pension schemes, one an unnamed £1.25bn pension scheme that was investing across a range of asset classes and looking to simplify its investment strategy, and the other the Aon Retirement Plan (ARP), Aon’s £2.5bn legacy defined benefit scheme with around 13,000 members.

According to Aon, the ARP trustees decided to appoint an outsourced chief investment officer to free up trustee time for wider strategic decisions and projects.

The third new client is an unnamed “prestigious” £1bn charitable foundation with a widely diversified asset pool.

William Parry, partner and head of delegated clients at Aon in the UK, said the consultancy had reinvigorated its OCIO offering as part of its delegated platform, investing heavily in technology and recognising the significant recent increase in the number of schemes looking to outsource.

“More and more pension schemes and asset owners are seeing OCIO services as the most efficient way to run the investment of their assets, allowing them a clear focus on strategy while retaining agility in the way the assets are invested,” he said.

According to Toby Goodworth, managing director and head of liquid markets at bfinance, the increased popularity of OCIO services has been encouraged by market volatility, increased portfolio intricacy, and the growing burden of regulatory compliance. 

Pension funds that recently opted for OCIO services include the closed Tesco DB scheme and Kier group pension schemes turning to Schroders, and BAE Systems’ £23bn DB plan appointing Goldman Sachs Asset Management.

As of 30 September, Aon had over £29bn of AUM in its EMEA delegated consulting business, and £144bn globally.

Mercer, meanwhile, yesterday announced the completion of its acquisition of Cardano, a deal it previously said would position it as “the pension provider of choice in the UK and the Netherlands”. The terms of the transaction remain undisclosed. In December last year Mercer announced it had reached an agreement to acquire Vanguard’s OCIO business in the US.