Should You Outsource Your Family Office’s Chief Investment Officer Role?
The role of a Chief Investment Officer (CIO) brings valuable sophistication, focus, deal flow, and due diligence to a family office. However, there is a growing trend in the family office space to outsource this function to third-party firms, which can help lower overhead costs. These firms often use advanced software and risk management tools.
When a family office uses an outsourced CIO service, they retain control over their real estate investments and direct investment decisions. The family makes direct investment and hard asset decisions in-house, while keeping the consulting firm informed of major changes in their holdings to manage overall portfolio risk.
To run a successful family office, a diverse team of professionals is needed to handle different types of investments. Typically, a family office employs 5-8 full-time employees, including a tax, trust, and estate lawyer, CIO, CFO/accountant, direct investment specialist, risk management/insurance specialist, and CEO