Author – Lucas Schellenberg, Global Managing Partner
How forward-thinking families are building investment powerhouses – and the leadership talent making it happen.
Executive Summary
Family offices currently manage approximately $3.1 trillion in assets under management globally, projected to reach $5.4 trillion by 2030 (Deloitte), yet most operate like it’s still 1990. While hedge funds deploy AI and private equity firms hunt unicorns, too many family offices remain trapped in wealth preservation mode – missing the biggest value creation opportunities in a generation.
The families winning today aren’t just protecting wealth. They’re building it aggressively through direct investments, co-investments, and operational value creation. The difference? They’ve assembled leadership teams that think like entrepreneurs, not accountants.
Family offices are at a turning point. The traditional functions – preserving and protecting family wealth – are no longer sufficient to meet the demands of today’s world.
This article outlines:
Why must family offices now operate with greater agility, digital sophistication, and entrepreneurial drive?
Which roles and competencies are critical for this transformation?
How to shift from reactive wealth administration to proactive value creation.
Five Forces Reshaping Family Wealth:
Key drivers are:
– Geopolitical Complexity: Trade wars and sanctions create both risks and arbitrage opportunities – but only for those with the right expertise to navigate them.
– Market Evolution: Traditional 60/40 portfolios are dead. Winning families are accessing private markets, crypto, and direct deals that banks can’t or won’t offer.
– Digital Transformation: Real-time data isn’t optional anymore. Families without sophisticated analytics are flying blind in volatile markets.
– Next-Gen Expectations: Younger generations don’t want passive income – they want to build companies and drive impact. Smart families are channeling this energy, not fighting it.
– Regulatory Maze: Tax optimization has become a strategic advantage requiring specialized expertise, not just compliance.
Family offices that remain purely passive risk losing relevance and performance in the medium term.
Core Challenges of Traditional Family Offices
– Fragmented governance: Lack of clear decision-making structures.
– Limited deal flow: Overreliance on banks leads to missed opportunities.
– Lack of digitalization: No real-time reporting, insufficient cybersecurity.
– Poor Next-Gen integration: Untapped potential of younger generations.
– Reactive operations: Administrative focus instead of value creation.
The Five Success Factors of Modern Family Offices
- Professional Governance
– Family charter with clear roles and responsibilities
– Independent advisory board with external experts
Research shows that “just over half (53%) of family offices globally have wealth succession plans for the family members in place”, indicating significant room for improvement in governance structures. (https://andsimple.co/insights/largest-family-offices/)
- Superior Deal Access
Traditional reliance on banks limits opportunities. Leading family offices have developed:
– Global network of PE and VC funds
– Direct co-investments and off-market opportunities
UBS research indicates that “family offices are slightly reducing exposure to private equity, allocations to private markets remain relatively high in 2024 at 21%”, showing continued emphasis on alternative investments.
- Technology & Transparency
Modern family offices require:
– Investment dashboards for real-time reporting
– Integrated systems for risk and performance monitoring
– Cybersecurity as a core operational pillar
According to Deloitte, “43% of family offices worldwide have experienced a cyberattack in the last 12-24 months, and 25% have experienced three or more attacks”, making cybersecurity critical. (https://investingintheweb.com/blog/largest-family-offices-assets/)
- Next-Gen Integration
Successful family offices actively involve younger generations through:
– Involvement in decision-making bodies
– Entrepreneur-in-residence programs
Deloitte research shows “Women now serve as the principals of 15% of family offices worldwide, demonstrating an increase in women taking on greater leadership roles”, reflecting evolving family dynamics. (https://www.ubs.com/global/en/wealthmanagement/family-office-uhnw/reports/global-family-office-report.html)
- Value Creation & Governance Excellence
The most sophisticated family offices focus on:
– Operational value enhancement in portfolio companies
– Strong legal and tax expertise for complex transactions
The Leadership Team That Makes It Happen
For over 20 years, our firm has seen firsthand how the right leadership transforms family office performance. Here are the critical roles:
– Independent Board
– Strategic Oversight: Supervision of the investment strategy, asset allocation, and diversification.
– Control: Review of risks, performance, and liquidity.
– Sparring Partner: Acting as a sounding board for the SFO management team (CIO, CEO, CFO).
– Transparency & Reporting: Ensuring the family receives regular, clear, and comprehensible updates.
– Independence: Providing an external perspective that balances emotional or overly close family-driven decisions.
– Succession & Continuity: Supporting generational transition and long-term stability.
Important: Independence means no close personal or business entanglement with the family and no self-interest in the family assets.
– Chief Investment Officer (CIO and or CEO)
What they do: Asset allocation, deal sourcing, performance monitoring
Background required: Experience in private equity, venture capital, and public markets
– Head of Direct Investments / Private Markets
What they do: Source, structure, and manage private market investments
Specialization: Co-investments, club deals, and private company acquisitions
– Chief Financial Officer (CFO)
What they do: Tax and reporting expertise, optimization of capital structure and liquidity
– Head of Legal & Tax
What they do: Strategic responsibility for legal and tax structures
Key focus: Minimizes regulatory risk and optimizes international tax efficiency
Collaboration: Works closely with CFO and CIO on M&A and co-investment transactions
– Chief Technology & Security Officer (CTSO)
What they do: Leads digitalization, data strategy, and cybersecurity initiatives.
As mentioned above (43% of family offices worldwide have experienced a cyberattack in the last 12-24 months), this role has become critical.
– Next-Gen Program Manager
What they do: Bridges generational perspectives, fosters knowledge transfer and innovation
– Family Governance Officer
What they do: Oversees processes, communication, and conflict resolution within the family
Case Studies & Best Practices
Digitalization in a Multi-Family Office
– Global investment dashboard reduced reporting time by 70%.
Next-Gen Integration
– Second generation built a venture portfolio delivering >20% IRR.
Value Creation & Legal Excellence
– Head of Legal & Tax structured a €250M co-investment for optimal tax efficiency, generating a 28% ROI in three years.
[We can provide full case studies on request]
H.I.E.C’s 18 Month Transformation Roadmap
Short term (0-6 months)
Audit governance, legal, and tax structures
Implement digital tools
Medium term (6-18 months)
Build a proprietary deal-sourcing network
Recruit key roles (CIO, Head of Legal & Tax)
This is where executive search expertise becomes critical. Finding leaders with the right combination of institutional investment experience and family office cultural fit requires specialized knowledge of the talent market.
Long term (18+ months)
– Fully integrate Next-Gen programs.
– Expand investment network internationally.
As these new leadership teams establish themselves, ongoing talent needs often emerge for specialized roles and advisory board positions.
Conclusion
The family offices thriving today operate more like private equity firms than traditional wealth managers. They’re entrepreneurial, data-driven, globally connected, and obsessed with value creation.
This shift represents a fundamental evolution in how sophisticated families approach wealth management. The traditional capital preservation model gives way to active value creation strategies requiring different capabilities and leadership expertise.
The transformation requires deliberate planning and the right leadership team. Building these capabilities takes time, but the foundations – governance frameworks, technology infrastructure, and most critically, experienced leadership – are readily available for families ready to invest.
For family offices ready to make this transformation, the biggest challenge is often finding the right leadership talent. At H.I.E.C, we specialize in placing the executives who turn traditional family offices into value-creating investment powerhouses. If you’re interested in discussing how strategic leadership appointments can accelerate this transformation, or would like to explore our approach to identifying family office executives, please reach out to Lucas Schellenberg, Global Managing Partner: