Investment Outsourcing

Investment outsourcing occurs when an organization delegates its investment management responsibilities to an external firm or third-party advisor. This practice allows companies, pension funds, or family offices to focus on their core operations while relying on professional investment managers to handle asset allocation, risk management, and portfolio performance. Outsourced investment management can offer access to specialized expertise and resources that might not be available in-house.

Example

A pension fund outsources its investment management to a third-party advisor, who handles the portfolio’s asset allocation and investment decisions, allowing the fund to focus on servicing its beneficiaries.