US OCIO industry set for rapid expansion and market consolidation by 2029

The outsourced chief investment officer (OCIO) industry in the United States is poised for significant growth and transformation, with Cerulli Associates projecting nearly $1.3 trillion in inflows by 2029 as new clients adopt the OCIO model for the first time or expand existing relationships. According to “The Cerulli Report, U.S. Outsourced Chief Investment Officer Function 2025,” the industry has already seen remarkable expansion, tripling from just over $1 trillion in assets under management in 2015 to more than $3.3 trillion anticipated by the end of 2024. By the close of the decade, Cerulli forecasts OCIO assets will reach $5.6 trillion, representing a robust average annual growth rate of 10.6% over the next five years.

This substantial growth is driven by several key factors, with new client adoption proving to be the strongest engine of inflows. Defined contribution (DC) plans are expected to lead in overall OCIO flows during the coming years, projected to see $294 billion in new assets allocated to the model, closely followed by corporate pension funds with $248 billion. The report highlights the increasing reliance of corporate defined benefit (DB) plans on OCIO providers, spurred by pension asset surpluses and a desire to outsource investment management to fiduciary experts.

Cerulli’s analysis further reveals the industry’s expanding footprint across institutional asset types; by 2029, it estimates that 9.6% of all institutional assets, including corporate DB and DC plans, endowments, foundations, health systems, private wealth, insurance general accounts, and public DB plans, will be managed under an OCIO mandate, up from 7.6% in 2024. This broadening client base reflects evolving market dynamics and the appeal of OCIO services to organisations seeking specialised investment expertise and operational efficiency.

Complementing this growth, the OCIO industry is undergoing a notable phase of consolidation. Assets managed by OCIO providers reached $2.9 trillion by the end of 2023, with forecasts suggesting a rise to $4.2 trillion by 2028 at an average annual growth rate of 7.9%. Larger providers now dominate the space, controlling 61% of global OCIO assets compared with 49% in 2017, an increase largely driven by mergers and acquisitions. This consolidation trend is underscored by recent high-profile deals, such as Eli Lilly’s $25 billion OCIO contract with Goldman Sachs Asset Management, following the firm’s $40 billion mandate win with Shell pensions, and BlackRock’s $30 billion OCIO agreement with Shell.

Industry experts note that the consolidation is reshaping competitive dynamics. According to Cerulli Associate Director Chris Swansey, larger OCIO providers are likely to exert fee pressures on smaller competitors, potentially stifling organic growth opportunities for mid-sized firms. Consequently, these major players may pursue inorganic growth through acquisitions, creating a bifurcated market where a handful of large-scale providers hold significant market share, while smaller firms carve out specialised niche roles.

This evolution has also sparked interest in expanding the OCIO model into burgeoning markets such as private wealth and nonprofit sectors. Cerulli reports a particularly fast-growing private wealth segment, projected to expand by 16% annually through 2027, becoming the fastest-growing client type for OCIOs. Factors such as inflationary pressures, market volatility, and recruitment challenges have spurred institutional investors and affluent private clients alike to seek the specialised investment insights and fiduciary oversight that OCIO providers offer.

Data from the 2025 PLANSPONSOR Outsourced Investment Manager Survey further illustrates the demand landscape, with half of union pension funds and endowments/foundations indicating likelihood to outsource or consider outsourcing investment management, alongside 42% of corporate pension funds. Smaller organisations with assets between $500 million and $1 billion demonstrated a stronger propensity to outsource compared to larger institutions, signalling outsourcing as a strategic solution for resource-constrained entities.

The expanding size of OCIO mandates is also a significant trend, with industry giants handling mandates worth tens of billions of dollars, underscoring both the scale and institutional confidence in outsourced fiduciary management.

The influx of new clients and capital, combined with ongoing consolidation and heightened competition, is prompting providers to enhance differentiation through service quality and strategic expansion. Kate McCabe, a practice executive at Northern Trust Asset Servicing, comments that growth has led many firms to pivot their business models and bolster their OCIO offerings to remain competitive, especially in the smaller provider segment where creating unique value propositions is increasingly challenging.

Despite rapid expansion, the OCIO industry contends with rising costs and regulatory complexities that have contributed to turnover among senior investment professionals. This adds complexity to an already dynamic environment, where providers must balance performance demands with operational resilience.

In sum, Cerulli Associates’ research and related market insights depict a vibrant OCIO industry on the cusp of further growth and structural change. As the OCIO model gains traction among institutional and high-net-worth investors seeking expert fiduciary management, the landscape will likely continue to be shaped by consolidation, innovative service delivery, and expansion into new client segments, defining the future contours of investment management outsourcing in the United States.