Vanguard has announced that it will be selling its outsourced chief investment officer (OCIO) business to Mercer, a unit of professional-services company Marsh McLennan. The OCIO business provides investment management services to nonprofit organizations and institutional investors in the U.S.
Approximately 120 employees from Vanguard’s OCIO division are expected to join Mercer as full-time employees once the deal is finalized in the first quarter of 2024. However, specific details about the deal, such as the sale price, have not been disclosed.
Marsh McLennan, known for its consulting and risk and insurance services, includes the Mercer unit, which offers wealth management services to various entities like pension plans, foundations, insurance companies, and family offices. Mercer has been operating an OCIO business since 2005.
According to Marc Cordover, Mercer’s U.S. Investments and Retirement Leader, the acquisition of Vanguard’s OCIO business will further enhance Mercer’s existing capabilities. Cordover emphasized that institutional investors, especially not-for-profit organizations, face numerous challenges and require robust solutions and global expertise to stay ahead of the curve. He expressed his excitement over welcoming Vanguard’s talented investment professionals who are already supporting this business into the Mercer team.
John James, managing director of Vanguard’s Institutional Investor Group, believes that OCIO clients will greatly benefit from Mercer’s expertise and capabilities. However, a spokesperson for Vanguard declined to comment further on the matter.