Osmosis Team Primer

Allocators 101
How LPs Think and Decide

Who holds the money, what they are solving for, and how they actually choose managers-so every Osmosis conversation is grounded in the allocator reality.

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Context

Why This Exists

The capital markets primer zoomed out (allocators → asset managers → real-world investments). This deck zooms all the way into the allocator side of the table.

5 Questions We Must Answer Fast

  • Who are they actually serving?
  • What problem are they solving for?
  • How do they set goals?
  • What do they report and to whom?
  • How much risk can they really take, and why?

Why It Matters

When we can answer those five in seconds, our capital formation conversations get sharper: we speak their mandate language, not ours.

This deck is the allocator cheat sheet for Osmosis teams.

Definition

What Is an Allocator, Really?

Working Definition

An allocator is an institution (or family) that stewards a pool of capital on behalf of someone else and decides which asset managers get to run slices of that capital.

Key Characteristics

  • They are fiduciaries first-obligation to beneficiaries and stakeholders.
  • They pick managers and strategies more than individual securities or deals.
  • They think in decades, even with short-term politics around them.
  • They live inside governance machines: boards, ICs, consultants, regulators.

GP/LP Translation

In GP/LP language from the capital markets primer, allocators are the LPs. They provide capital and hire GPs to put it to work.

Remember: every allocator choice is a manager selection choice.

Mandate

The Allocator's Job in One Sentence

Core Mandate

Turn a pool of promises into a portfolio that can keep those promises-with acceptable risk and defensible process.

Promises They Must Keep

  • Public pensions: pay a check every month for life.
  • Endowments & foundations: fund a university or mission forever.
  • Insurance general accounts: meet claims and satisfy regulators.
  • Sovereign funds & foreign pensions: deliver prosperity and retirement security.
  • Family & multi-family offices: grow and protect wealth across generations.

Two Parts of the Job

  • Keep the promises: liability-aware, risk-constrained portfolio construction.
  • Defensible process: if challenged, show a sane path from information to decision.

Osmosis plugs into part two: surfacing spoken inputs (IC meetings, consultant remarks, CIO interviews) before they hit databases.

Allocator Families

US Public Plans

Who They Are

State and local retirement systems plus public university regents (CalPERS, CalSTRS, TRS Texas, UC Regents, etc.).

Stakeholders: teachers, firefighters, state/city workers, public university systems; taxpayers, legislators, unions, rating agencies, media.

Obligations

Pay lifetime, often inflation-linked benefits on time. Maintain funded status (assets vs liabilities). Follow open-meeting and public records laws. Demonstrate prudent-person behavior under scrutiny.

Goals & Pacing

Return target framed as a discount rate (roughly 6.5-7.0%). Explicit policy portfolios and pacing plans for private markets to hit target allocations.

Reporting & Signal

Among the most transparent allocators: board agendas, IC books, staff memos, video/audio. Minutes show manager line-ups, consultant recommendations, pacing, risk debates.

Prime Osmosis territory: we can see exactly who they consider and why, often within hours.

Risk Posture

Long-term horizon but political and career risk are real. Favor scaled, established managers with defined emerging manager buckets. Portfolios must survive recessions and headlines.

Allocator Families

Taft-Hartley / Multi-Employer Plans

Who They Are

Union and industry pension plans (construction trades, teamsters, electrical workers, etc.). Stakeholders include union members, beneficiaries, union leadership, and employer sponsors.

Obligations

Keep the fund solvent and avoid critical-and-declining status. Balance union politics and fiduciary duty (often labor-friendly strategies).

Transparency

Varies. Many publish minutes and some meeting materials, but with less depth/standardization than big state plans. Still enough to see manager searches and pacing themes.

Risk Posture

Similar liability profile to public pensions but smaller and more concentrated. Often rely heavily on consultants and manager-of-managers because staff is lean.

Allocator Families

Endowments, Foundations, Mission Investors

Covers private university endowments, public university systems, private foundations, operating foundations/NGOs/faith-based investors, and hospital systems.

Stakeholders

Universities: students, faculty, future generations, donors. Foundations: grantees, communities, boards. Faith-based/NGOs: mission and congregations. Hospitals: patients and operations.

Obligations

Maintain perpetual or very long-term capital while funding annual spending rules (~4-5% of AUM). Align investments with mission and values (ESG, exclusions, impact).

Goals & Risk

Real return lens: CPI + 4-5% after fees. Comfortable with higher alternatives allocations (40-60%+ for top endowments). Sophisticated debates on manager selection alpha vs beta and illiquidity premia.

Transparency & Posture

Public university systems: often transparent with board books and recordings. Private universities/private foundations: selective (annual reports, 990s). NGOs/faith-based/hospitals: mixed. Generally higher tolerance for illiquidity/volatility; focused on manager quality, alignment, edge.

Allocator Families

Insurance General Accounts & Corporate Pensions

Insurance General Accounts

Stakeholders: policyholders, regulators (NAIC), rating agencies, shareholders. Obligations: match long-dated liabilities and maintain capital ratios/ratings. Goal: maximize spread between investment yield and credited rates under capital rules.

Transparency: statutory filings, earnings calls, NAIC schedules; some CIO commentary, fewer deep IC records.

Risk posture: return-per-unit-capital is king; heavy fixed income and structured products; alternatives skew to capital-efficient yield (private credit, real estate, infrastructure) vs high-volatility equity.

Corporate DB Pensions

Stakeholders: corporate CFO/board, employees/retirees, shareholders. Obligations: close funding gap without blowing up earnings volatility.

Goals: often de-risking-LDI hedges, reduce equity risk, annuitize or offload to insurers.

Transparency: 10-Ks, 5500 filings, some public commentary; rarely detailed IC minutes.

Risk posture: conservative and increasingly liability-hedged; tactical alternatives; CFO-driven dynamics.

Allocator Families

Foreign Pensions & Sovereign Wealth Funds

Who They Are

Canadian plans (CPP Investments, Ontario Teachers'), Dutch/APG, UK USS, AustralianSuper, plus sovereign funds like NBIM (Norway), GIC, Temasek, ADIA, PIF.

Obligations

Preserve and grow national wealth or retirement capital across multi-generational horizons. Some SWFs diversify commodity dependence into financial wealth.

Goals & Risk

Many run sophisticated internal portfolios and also allocate to external GPs. Risk varies: NBIM leans broad global beta with ESG overlays; GIC/Temasek/Canadian plans are heavy in private markets and direct deals. They are very large check writers.

Transparency

Wide range. NBIM and several Canadian/European plans are highly transparent (reports, hearings, CIO interviews). Gulf and some Asian SWFs are far more opaque with only occasional commentary.

Allocator Families

Family Offices & Multi-Family Offices

Who They Are

Single-family offices (Cascade, MSD, Soros) and multi-family offices (Bessemer Trust, Pitcairn, etc.). Stakeholders are families, often a patriarch/matriarch, next-gen leadership, and an IC.

Obligations

Preserve and grow wealth across generations. Manage tax, concentration (core operating companies or big public stakes), and family politics. Fund philanthropy, lifestyle spending, and sometimes operating businesses.

Goals & Risk

Extremely idiosyncratic: some are ultra-conservative, others operate like mini endowments with heavy PE/VC. Often prefer co-invests and direct deals leveraging their network.

Transparency

Among the least transparent allocators. Public signals are sparse-occasional conference remarks or press. We often infer via advisors, multi-family offices, and GP relationships.

Important but low-signal for Osmosis; focus on their advisors and networks.

How They Set Targets

How Allocators Define Goals and Success

Core Questions

  1. What are our liabilities or spending needs?
  2. What is the required return (discount rate or real-return target)?
  3. What is our risk budget (volatility, drawdown, illiquidity)?
  4. What constraints do we have (regulation, policy, reputation, capacity)?

Policy Portfolio in Practice

Answers roll into target allocations by asset class, pacing plans for private markets, and risk limits (tracking error, leverage, concentration).

Everything is framed through: can we meet liabilities/spending within risk limits?

The Spoken Edge

Changes are almost always spoken before they are written: "We are thinking about increasing private credit from 5% to 8%," "We want more emerging managers in infrastructure," "We are pausing new VC commitments for 12-18 months." Osmosis is built to catch those spoken shifts first.

Process

Governance, Decision-Making, Gatekeepers

Common Structure

  • Board / Regents / Trustees: set policy, approve big commitments, meet quarterly.
  • Investment committee: subset of board plus staff; debate manager line-ups, pacing, approvals.
  • Staff investment team: CIO, deputies, PMs, analysts; underwrite managers and manage relationships.
  • Consultants & OCIOs: non-discretionary advice or full discretion.
  • Product allocators (MoM, FoF, MFOs): multi-manager products for smaller LPs.

The Decision Journey

  1. Signal appears (peers, conferences, consultants, Osmosis intel).
  2. Initial screen: fit to policy, pacing, capacity.
  3. Diligence: meetings, data requests, on-sites, references.
  4. Staff and consultant memo with recommendation.
  5. IC discussion-the meeting that matters.
  6. Vote/approval: sized and slotted into pipeline.
  7. Documentation and reporting back to boards/databases.

We focus on IC and consultant stages where mandates are won or lost.

Signals

Transparency & Reporting: Where the Signals Live

High Transparency

US public plans (state/local pensions, some Taft-Hartley, public university regents) plus some foreign plans. Publish board/IC books, agendas, and often audio/video. We can see manager line-ups, consultant recommendations, pacing, risk debates.

Osmosis: build near-real-time radar with speaker-attributed quotes and alerts within hours.

Medium Transparency

Consultants and OCIOs (views appear in board books). Large private endowments and foundations (speeches, panels, letters). Insurance general accounts and corporate pensions (earnings calls, filings, CIO interviews). Manager-of-managers and MFOs (whitepapers, events).

Osmosis: lean on events, interviews, and consultant content for signals.

Low Transparency

Family offices and some SWFs/faith-based investors/NGOs rarely publish detailed meetings. Signals are sparse and indirect.

Osmosis: track advisors, counterparties, and platforms where they occasionally appear.

Risk Posture

Risk & Illiquidity Map

High Risk / High Illiquidity

Elite university endowments, some foundations, some SWFs, some family offices. Higher PE/VC/real assets allocations, more concentrated bets, more emerging manager appetite.

Moderate Risk / High Illiquidity

Large public pensions, foreign pensions, church/healthcare systems. Big private markets programs with heavier governance and consultant involvement.

Low-Moderate Risk / Low-Moderate Illiquidity

Insurance general accounts, corporate DBs in de-risking mode. Focus on yield, capital efficiency, and risk-based capital constraints.

Idiosyncratic / Context-Dependent

Family offices, MFOs, faith-based groups, some NGOs. Posture is as much about people (CIO, patriarch, board chair) as allocator type.

🎯

How Capital Formation Maps It

This pension cannot be first close; board will not go first on a new strategy. This endowment will take more risk if we show edge and alignment. This insurer cares less about 25% IRR and more about stable, capital-efficient yield. We want the same instant instincts when an allocator name hits an alert.

Cheat Sheet

Allocator Universe: Quick Sketches (1-10)

1. US Public Plans

Retirement assets for public employees; very public process. Obligations: pensions, funded status, satisfy boards/legislators. Transparency: very high-signal engines for Osmosis.

Osmosis note: top priority; many of our best alerts and wins start here.

2. Consultants

Advise allocators on asset mix and manager selection; write the memos. Not allocators, but gatekeepers. Transparency via board books and presentations.

Osmosis note: one consultant view can make or break a fundraise.

3. OCIOs

Act as outsourced CIOs with discretion to allocate. They wield allocator power across multiple clients.

Osmosis note: high leverage; one OCIO relationship opens a portfolio of LPs.

4. Public University Regents / Endowments

Invest public university assets; often publish books/audio like pensions. Obligations: support operations and long-term growth. Transparency similar to public plans with more endowment-style risk appetite.

5. Taft-Hartley Plans

Union/industry pension plans. Obligations: negotiated pension promises plus union politics. Consultant-heavy; medium transparency.

6. Asset Managers (GPs)

Compete for mandates; present to allocators. Not allocators-they are our customers. We help them see who is buying what and what consultants/allocators say about their strategy and competitors.

7. Manager of Managers / FoFs

Package multi-manager products; product allocators for smaller LPs. Provide diversification and access.

Osmosis note: distribution layer into many smaller, opaque LPs.

8. Private University Endowments

Large, sophisticated portfolios heavy in alternatives. Obligations: perpetual capital and spending. Transparency: medium-low (selective), but CIOs speak at conferences.

Osmosis note: high-signal when they do speak; tastemakers other allocators watch.

9. Foundations (Private)

Invest philanthropic endowments. Transparency low-medium (990-PF data, occasional reports/talks). Smaller volume of public meetings.

10. Insurance General Accounts

Invest insurer balance sheets with ALM constraints. Obligations: meet claims, satisfy regulators, protect ratings.

Osmosis note: growing importance in private credit and structured products; signals via earnings calls and industry events.

Cheat Sheet

Allocator Universe: Quick Sketches (11-19)

11. Corporate Pensions (DB)

Sponsor defined-benefit plans and de-risk over time. Transparency is low; clues in filings and earnings. More interesting via consultants, OCIOs, and events.

12. Foreign Pensions (ex-US)

Retirement assets abroad; often large and sophisticated. Transparency medium and country-dependent.

Osmosis note: important check writers; signals in global conferences and some hearings.

13. Sovereign Wealth Funds

State-owned investment funds (oil wealth, FX reserves, etc.). Transparency generally low with selective disclosures.

Osmosis note: when they speak, it is big directional signals (e.g., upping infra/credit/tech by billions).

14. Family Offices

Invest a single family's wealth; highly bespoke and low transparency.

Osmosis note: triangulate via GPs and multi-family offices.

15. Multi-Family Offices (MFOs)

Manage pooled wealth for multiple families; behave like boutique allocators. Aggregate decisions for otherwise invisible families.

16. Foundations/NGOs (Operating)

Mission-driven portfolios for operating NGOs and charities. Transparency low; occasional mission-investing conferences.

17. Faith-Based Investors / Church Pensions

Invest on behalf of religious organizations with values screens. Thematic barometer for ESG/values-driven trends.

18. Healthcare Systems / Hospital Endowments

Manage investment pools for hospitals and health systems. Mission-sensitive with medium check sizes; increasingly active in alternatives.

19. Municipal Treasuries & Cash Pools

Invest short-duration operating cash. Allocators, but typically not mandate-scale for private funds.

Osmosis note: lower priority for mandate hunting; more relevant for short-term or cash products.

Osmosis Motion

What This Means for Osmosis

Mental Model for the Team

  1. What promises are they trying to keep?
  2. Who do they answer to (board, regulator, taxpayers, family)?
  3. How transparent are they (live radar vs occasional pings)?
  4. What is their likely risk and illiquidity posture?
  5. Who are their gatekeepers (consultants, OCIOs, MFOs)?

Product Edge

  • Real-time alerts when ICs and CIOs talk about pacing, strategy shifts, manager preferences.
  • Speaker-attributed quotes that become openers: "Here is what your CIO said on Tuesday..."
  • Watchlists and routes by plan type, strategy, check size to surface the right allocators for each rep.

How Capital Formation Uses It

  • Senior IR/Heads of Capital Formation: prioritize funds/strategies to push now based on who is in market; tailor narratives to allocator constraints.
  • Associates/RMs: build lead lists of allocators actively discussing their strategy this week; prep meetings with exact quotes and IC context; map influence networks (which consultant drives which allocator).

Speed Is the Advantage

We turn spoken allocator decisions into alerts within hours, not quarters. That is how our customers become first in the room with the right angle and win nine-figure mandates before they hit legacy databases.

Wrap Up

The Allocator Story in 3 Lines

Allocators are fiduciaries turning promises into portfolios. Their constraints-liabilities, politics, regulation, mission-explain how they invest.

Different allocator families see the world differently: public pensions, endowments, insurers, SWFs, and family offices all have distinct goals, risk appetites, and transparency levels.

Their most important decisions are spoken before they are written. Osmosis captures those conversations in real time and turns them into the signals our customers use to win mandates faster.

Now you get the LP table. Go sell. 🚀