Defined contribution plans have begun to use multimanager funds to increase efficiencies and, where applicable, leverage the relationships formed by companies’ defined benefit plans. Outsourced chief investment officer providers have also adopted multimanager funds to bring scalability to smaller institutional investors. For fund managers, a key challenge of managing these funds is liquidity management. This whitepaper will explain why using an overlay manager can tackle this challenge, generating operational efficiencies, improved tracking error, and incremental return for the funds.