Why family offices can’t keep investment chiefs

A family office executive made an urgent phone call to Gaurav Shah, the managing partner of Arete Ventures. The company recently hired the CIO of the family business, but he had quit within 11 months. Shah was tasked with finding a replacement, but he believed the problem lay not with the CIO, but in the chaotic situation he was thrown into. The CIO was hired without a clear mandate or supporting team, which made his role difficult.

Family offices, responsible for managing significant assets, are transforming from treasury desks focused on protecting wealth to professional investment institutions. However, they struggle to find and retain skilled Chief Investment Officers (CIOs) who can lead the investment program. These professionals need a clearly defined mandate, an operating structure, and a supporting team to succeed.

Many professionals who possess deep experience in private equity, venture capital, or institutional investing are asked to build the entire platform from scratch, which can be challenging.

The changing nature of family offices, with more than 300 managing $30 billion in assets, is evident. The ecosystem is growing rapidly, but CIO recruitment remains a significant challenge. Family offices often operate with limited transparency and are pressured to comply with regulations. Finding a CIO who can work within the intensely personal culture of a promoter-led office is difficult, as candidates must balance the professional expectations with familial relationships.

Some families have restrictive criteria for candidates, such as cultural fit or dietary preferences. This can make it challenging to find the right executive. However, as the demand for CIOs far exceeds the supply, some family offices are reassessing their filters and becoming more open to candidates who meet the investment capabilities but may not fit all personal preferences.