As competition among outsourced chief investment officers heats up, Morgan Stanley has selected a partner at Cambridge Associates to oversee its $184 billion OCIO business. According to an internal company memo received by Institutional Investor, Sona Menon will join Morgan Stanley as head of OCIO. Effective April, she replaces Alper Daglioglu, who left in January to join Brookfield Asset Management.
Menon will report to Lisa Shalett, CIO for the firm’s wealth management division and head of the global investment office, and Jeremy France, head of institutional consulting services. Most recently, Menon was at Cambridge Associates, where she was the firm’s OCIO and head of pensions for North America.
Morgan Stanley has been working to build its OCIO business even as it looks to cut a significant portion of its workforce. In 2022, it assumed management of Hartford HealthCare’s $4.3 billion portfolio, an unconventional move for healthcare providers at the time that sparked internal turmoil and resignations within HHC. Also that year, Morgan Stanley took control of Vanderbilt University Medical Center’s $1.1 billion portfolio. As of June, Morgan Stanley is the sixth largest OCIO provider based on assets managed.
The OCIO industry is seeing rapid expansion, as nonprofits and healthcare increasingly turn to outsourcing. OCIO-managed assets are expected to reach $4.2 trillion in the U.S. by 2028. Globally, that figure could reach $7.3 trillion by 2029, based on Chestnut Advisory’s updated forecast incorporating new reporting criteria.
Endowments and foundations have been driving much of the OCIO growth. Cerulli Associates projects an 11.3 percent annual increase in outsourced E&F assets over the next five years.
As more institutions turn to outsourcing, large OCIO providers have also been seeking growth through consolidation (see Mercer buying Vanguard’s OCIO business and investment boutique SECOR, Hightower buying into NEPC and Cerity Partners merging with Agility).
