Foundations are increasingly allocating capital to private markets—especially private equity and private credit—and turning to outsourced chief investment officers (OCIOs) to navigate the complexities of these investments. Smaller foundations, which often lack internal investment infrastructure, are leading the shift toward OCIOs, while larger institutions are beginning to explore outsourcing due to rising internal costs. Alan Lenahan, CEO of FEG, emphasizes the challenges smaller organizations face with co-investments and direct deals under traditional governance models. While he acknowledges recent frustrations with slow distributions and muted returns in private equity, he underscores its long-term potential, particularly in the lower- and middle-market where opportunities for exits into mega funds remain strong.