Mercer to Add Vanguard’s Not-for-Profit-Focused OCIO Team

The Vanguard Group is shedding its institutional outsourced chief investment officer business focused on not-for-profit organizations with a sale to Mercer’s investment and retirement consulting division.

Mercer, which provides OCIO services to retirement plan sponsors, plans to complete an acquisition of Vanguard Institutional Advisory Services in the first quarter of 2024, according to a Tuesday announcement. Neither firm provided terms of the deal.

Vanguard’s OCIO business is focused on not-for-profit organizations and other institutional investors and will add more than 1,000 clients and about 120 employees to Mercer’s existing OCIO business, according to an update on Vanguard’s website.

The move comes shortly after Marsh McLennan announced that Mercer will be getting a new CEO and president at the end of March 2024. In an October announcement, Pat Tomlinson was named president, with plans to take the role of CEO from Martine Ferland when she retires in March.

Mercer’s acquisition of Vanguard’s OCIO business was driven in part by its strength in the not-for-profit sector and “client-centric” approach, Marc Cordover, Mercer’s U.S. investments and retirement leader, said in a statement.

“We know institutional investors, and not-for-profit organizations specifically, continue to face a range of challenges,” Cordover said. “They require robust solutions and global expertise to stay ahead of the curve.”