Overcoming key challenges in family office investing

FAMILY offices (FOs) are as unique as the families they serve. Many also share very similar characteristics that have made them successful entities in their own right. However, where some do not attain the standard they seek, there are some practical guidelines that can put them on the right path towards achieving more consistent investment outcomes.

SCALE

One of the most significant mismatches in FO investing is in the allocation of investment resources. Why? FOs are called upon to manage diverse multi-asset portfolios, often with a minimum of staff, research services and technology. Demands are more pronounced when the family head wishes to make direct investments in venture capital, private equity or real estate. Hiring, motivating and retaining top investment talent is a challenge for even the largest global asset management firms. FOs need to field a team that can manage to family expectations or consider scaling back the scope of investing and possibly look at outsourcing.