Red Cross Picks Cambridge Associates to Manage Investment Office

(Bloomberg) -- The American Red Cross hired Cambridge Associates to oversee its pension and endowment assets amid increasing competition among managers to run investment offices for institutions.

The portfolios total about $3 billion, according to people familiar with the matter. The Red Cross and Cambridge Associates declined to comment on the size of the assets.

Cambridge Associates will provide two teams to handle the assets with “very different risks and objectives,” the Red Cross said in a statement. The pension fund will be managed to reduce and eventually eliminate financial risk. The endowments team will focus on maximizing growth over the long term.

The appointment is one of the more significant in the outsourced chief investment officer, or OCIO, business, in which money managers run investment offices for institutions and manage the portfolios. About $100 billion has been outsourced in higher education, which has more than doubled since 2010, according to data compiled by Bloomberg.

The Red Cross, which is based in Washington, said in December it eliminated its in-house investment office and began a search for an outside firm. The Red Cross said funding requirements were met for the pension, and following a shift in investing strategy, the organization no longer had the scale to warrant the expense of an internal team.

Greg Williamson, the nonprofit’s chief investment officer, who was hired in 2015 from BP America Inc., left after the December announcement.

Cambridge Associates, a Boston-based investment consultant to nonprofits and other institutions, has been shifting its focus to asset management through its CA Capital Management. The University of Louisiana Lafayette Foundation said last month it hired Cambridge Associates to run its investment office and oversee a $170 million endowment.

©2018 Bloomberg L.P.