From PE Hub

Family offices are becoming a preferred destination for many investment professionals, with several pros making the move these past months.

“There was a time all investment guys wanted to go to hedge funds; now they want family offices,” said Michael Castine of Ridgeway Partners, an executive search and consulting firm.

Among those who have made the move recently:

  • APG Asset Management’s Megan Bethke joined Mousse Partners, the family office of Charles Heilbronn of Chanel.
  • Ex-Goldman Sachs’ Richard Kimjoined Mike Novogratz’s family office subsidiary Galaxy Digital.
  • Melinda Barberleft Harvard Management Company to join Pilot House Ventures, the family office of billionaire Amos Hostetter Jr.
  • And Andrew Cantwell left Norwest Equity to start Carlson Private Capital, a family office for the Carlson family.

Family offices are attractive for some key reasons.

First, the investment professional does not have to raise money. There is a ready pool of funds to be invested that does not come with an end-date for deployment. “This gives us tremendous flexibility in how we structure deals and build sustainable enterprises,” Cantwell said.

Second, it offers an opportunity to shift gears in one’s career, said Charles Skorina, who recruits chief investment officers for family offices and institutional investors and asset managers. At most institutional investors, you move up or move out, Skorina said. “Many professionals, one or several levels down, leave to become CIOs at a family office or endowment or foundation,” he said.

“What happens next?” is a concern with some managers of the middle-market and lower-middle-market funds of bigger private equity firms, said a private equity professional who recently left to join a family office. They worry that they are not in the same league as the multi-billion-dollar fund managers at the firm, “so you have to think hard about what you want to end up with,” the source said.

Third, quality of life is a strong attraction of family offices. Even if the compensation is lower, you will not end up working 24/7, Skorina said. And compensation may not be lower at family offices. In addition to a base salary and bonus, some family offices also offer co-investment opportunities to their investment professionals, Skorina said.


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