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Fund Evaluation Group Is Not for Sale, New Leader Vows

As one consulting firm cashes out with Goldman Sachs, FEG goes all in on independence.

Fund Evaluation Group Investment Advisors — one of last and largest independent consulting shops in the country— will change leaders at the end of this year, the firm announced. 

President and chief executive officer Scott Harsh plans to step down after 28 years, to be succeeded by 26-year FEG veteran and institutional services head Rebecca Wood. She has served on the management team since 2002, and was the 13th employee of what’s now about a 140-person company. 

Cincinnati-based FEG advises institutional clients on about $69 billion in assets, the majority of which belong to foundations, endowments, and other nonprofits. Clients can expect no radical changes under Wood’s leadership, according to the vision she laid out in a Wednesday interview with Institutional Investor.   

As with nearly all of its peers, FEG began as a pure-play advisory firm and evolved into an asset manager as well. As of June 30, FEG said it served as an outsourced-chief investment officer to $6.5 billion. An OCIO’s degree of investment discretion varies by client, but fees for the service are uniformly higher than for consulting work. 

Commercial pressure has also driven extensive activity in mergers and acquisitions. Independent consulting firms have amalgamated under publicly traded giants such as Willis Towers Watson, Mercer, Russell Investments, and Aon.

Earlier this month, Goldman Sachs Group's asset management unit agreed to buy Rocaton Investment Advisors — one of FEG’s major independently-owned competitors.  

[II Deep Dive: GSAM Agrees to Buy Rocaton]

“We love the independence,” Wood said. “The fact that there are few independent firms makes it an even better story for us. We are committed to remaining independent, and when we went to an ESOP [employee stock ownership plan] last year, we could have easily sold,” she continued. “We had a lot of discussion: how do you have a successful equity succession plan? I am proud to say we are now 100 percent employee-owned by 100 percent of our full-time employees.” 

FEG pushes its ownership structure as a major selling point to potential clients. Wood — who leads the consulting team in her current role — has found that independence also draws certain talent. 

“At least two of our current consultants used to be with firms that were acquired, but found the new organization just didn’t fit how they worked,” she said. “They preferred a smaller, boutique organization. And the truth is, we’ve had a really easy time retaining people.” 

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