Episode summary
Episode 343: Rich Nuzum of Franklin Templeton: Outsourced CIO relationships - playing the long game
The Fiftyfaces Podcast
· · Hosts: Aoifinn Devitt · Guests: Rich Nuzum
Summary
Rich Nuzum argues that the hardest part of investing is not the math but the human work: listening, surfacing real risk tolerance, and helping diverse committees make decisions under uncertainty. He says humility and diversification are central beliefs, and that clients often discover their true constraints only when markets are stressed.
He traces how OCIO has evolved from a “do it for me” model for clients without in-house staff to a “keep up with me” model for sophisticated owners that want a partner to add value on cutting-edge issues. In his view, the fastest-growing demand is tied to private market access, private credit, infrastructure, impact, and hedge funds, especially where clients want diversification, liquidity management, and return enhancement.
Nuzum also stresses that vertically integrated OCIO platforms can move faster in crises and in semi-liquid private market structures, because they can adjust portfolios and implement changes more quickly. He is skeptical of total-return investing when stakeholders are really peer-group benchmarked, saying programs can be “whipsawed” if governance and expectations are not aligned. The broader lesson he draws from his career is that setbacks often create the biggest opportunities, and that being consistent and “nice” matters in a small, word-of-mouth industry.
Key takeaways
- Nuzum says the key OCIO skill is not efficient-frontier math but active listening, judgment, and helping committees act under uncertainty.
- He believes humility and diversification are essential because no portfolio should exceed a client’s real risk tolerance.
- He sees the fastest-growing OCIO demand in the “keep up with me” model, where sophisticated clients want a partner, not a replacement, for their internal team.
- He says vertically integrated OCIOs can respond faster in crises and in private market allocations because they can implement changes within hours or days.
- Nuzum argues total-return investing works only when stakeholders are aligned; otherwise peer-group benchmarking can cause a program to be abandoned.
- His career view is that disappointments often lead to the biggest promotions and learning opportunities, if handled well.
Notable quotes
“the soft skills that are hard. listening actively to people, understanding their questions and where they're coming from”
“humility is really important in investment and we express that mathematically by diversifi”
“we need to focus our resource on serving our clients. Can you help with that”
“today's success breeds tomorrow's opportunity and again sometimes even your failure”
How the episode opens
This podcast series is kindly sponsored by Evston Capital. For over 20 years, Evston Capital has had a key focus in identifying early stage investment managers it believes are capable of generating long-term value added returns in complex innovative strategy areas. This series is also sponsored by Alvine Capital.
Alvine Capital is a specialist investment manager and placement boutique with a particular focus on alternative assets, a significant presence in London and Stockholm. But what's grown really quickly and kind of some of the larger mandates are mandates that are more a keep up with me model where they have a sophisticated in-house team, a CIO, other team members who are just as smart, just as expert as our OCIO team members, and they're not looking for us to tell them what to do, but they're looking for us to add value as they whiteboard that out and figure out how to democratize access to private market alternatives or which areas of the private credit industry are going to offer the best diversification opportunity. and return enhancement going forward.
They're struggling with cutting edge issues and investments and they want a partner who's going to add value to that. But it's a partner. It's not somebody to tell them what to do.
And in implementation again, we're going to do that together.
I'm Ethan Devit and welcome to the 50 Faces podcast. A podcast committed to revealing the richness and diversity of the world of investment by focusing on its people and their stories. I'm joined today by Rich Nusen who is head of OCIO at Franklin Templeton.
He joined Franklin Templeton from Mercer where he spent more than three decades providing investment consulting advice to institutional investors. He holds an MBA in analytic finance and accounting from the University of Chicago and a bachelor's degree in mathematical sciences and mathematical economic analysis from Rice University.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- outsourced cio
- ocio evolution
- investment consulting
- institutional investing
- global ocio adoption
Companies and tickers mentioned
- Franklin Templeton
- Mercer
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Fiftyfaces Podcast, this episode and its artwork belong to Aoifinn Devitt. Octagon is not affiliated with the show; this page is an independent summary.
