Key Takeaways
- • Smaller foundations and endowments have nearly doubled private equity and venture capital allocations to 11.2 percent in Q1 2026, up from 5.8 percent in Q1 2021, according to OCIO Analytics data covering 56 outsourced chief investment officers.
- • Institutions with assets under $100 million more than doubled their private market exposure, while those holding $250 million to $500 million increased allocations by over five percentage points, narrowing the historical gap between smaller and mega-endowments.
- • Smaller institutions with less than $1 billion in assets are now constructing portfolios with 15 to 20 percent allocated to private markets, a positioning previously reserved for large, sophisticated investors.
- • The OCIO industry has grown to approximately $4 trillion, providing smaller institutions with previously unavailable infrastructure and vehicles to access private equity and venture capital regardless of portfolio size.
- • This shift reflects both OCIO capability expansion and institutional expectations for weaker equity market returns, driving diversification into alternative asset classes across the endowment landscape.
Summary
The outsourced chief investment officer industry is reshaping capital allocation patterns among smaller foundations and endowments, with private market exposure expanding dramatically across institutions that historically lacked the scale or sophistication to access these opportunities. According to OCIO Analytics data from 56 OCIOs, the average allocation to private equity and venture capital has nearly doubled over five years, rising to 11.2 percent in the first quarter of 2026 from 5.8 percent during the same period in 2021.
The shift has been particularly pronounced among smaller institutions. Endowments and foundations with less than $100 million in assets more than doubled their private market exposure, while those holding between $250 million and $500 million increased allocations by more than five percentage points. Notably, even institutions that previously maintained meaningful private market exposure have continued raising allocations, indicating a broad institutional repricing of private asset class importance.
Brad Alford, founder of OCIO Analytics, attributed this acceleration to the structural capabilities now embedded within the OCIO sector. "OCIOs have all the vehicles to invest in the space even for smaller portfolios," Alford told Institutional Investor. The democratization of access has been striking: smaller institutions with less than $1 billion in assets are now constructing portfolios with 15 to 20 percent invested in private markets—allocations once exclusive to mega-endowments and foundations. "The big endowments and foundations have always been heavy in private equity and venture," Alford said. "Now, so many endowments and foundations go OCIO, and OCIOs have the capabilities to invest in these asset classes, all the $700 million endowments are going in."
This reallocation coincides with the OCIO industry's expansion to approximately $4 trillion in assets under management and aligns with broader institutional expectations for weaker equity returns, prompting investors to diversify into alternative asset classes. The convergence of OCIO infrastructure growth, smaller institution adoption, and macroeconomic headwinds has fundamentally altered private market accessibility across the endowment ecosystem.
The shift has been particularly pronounced among smaller institutions. Endowments and foundations with less than $100 million in assets more than doubled their private market exposure, while those holding between $250 million and $500 million increased allocations by more than five percentage points. Notably, even institutions that previously maintained meaningful private market exposure have continued raising allocations, indicating a broad institutional repricing of private asset class importance.
Brad Alford, founder of OCIO Analytics, attributed this acceleration to the structural capabilities now embedded within the OCIO sector. "OCIOs have all the vehicles to invest in the space even for smaller portfolios," Alford told Institutional Investor. The democratization of access has been striking: smaller institutions with less than $1 billion in assets are now constructing portfolios with 15 to 20 percent invested in private markets—allocations once exclusive to mega-endowments and foundations. "The big endowments and foundations have always been heavy in private equity and venture," Alford said. "Now, so many endowments and foundations go OCIO, and OCIOs have the capabilities to invest in these asset classes, all the $700 million endowments are going in."
This reallocation coincides with the OCIO industry's expansion to approximately $4 trillion in assets under management and aligns with broader institutional expectations for weaker equity returns, prompting investors to diversify into alternative asset classes. The convergence of OCIO infrastructure growth, smaller institution adoption, and macroeconomic headwinds has fundamentally altered private market accessibility across the endowment ecosystem.
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