Family Offices Emerge as New Focus for PE, Hedge Fund Talent
Private equity firms and hedge funds are increasingly targeting talent from family offices and sovereign wealth funds. These entities have reportedly lagged in modern talent acquisition practices and have underperformed benchmarks, creating an opportunity for firms to attract experienced professionals.
- The global number of single-family offices is projected to grow by 75% between 2019 and 2030, reaching over 10,720, with their total estimated assets under management expected to rise by 73% to $5.4 trillion in the same period. - Private equity has surpassed public equity as the top asset class for family offices, accounting for 30% of portfolios in 2024, a significant increase from 22% in 2021. This shift drives the demand for professionals with direct investment experience. - Compensation at family offices is becoming increasingly competitive with private equity and hedge funds; average base salaries for executives in the U.S. grew from $471,000 in 2023 to $541,000 in 2025, with bonuses rising even more sharply. Many are also adopting performance-based incentives like carried interest and co-investment opportunities. - The primary recruitment challenge for family offices is often not a "talent shortage" but rather unclear role design, outdated expectations, and a failure to assess key traits like discretion and loyalty. A 2024 report indicated that 36% of U.S. family offices and 45% in Europe had difficulties recruiting new staff. - For professionals moving from private equity to family offices, a key attraction is the long-term investment horizon, which contrasts with the often quarterly performance pressures at funds. A better work-life balance is another significant draw for talent leaving the demanding schedules of Wall Street. - Sovereign wealth funds are also becoming more active direct investors in private markets, often co-investing alongside private equity partners to save on fees and gain more control. This creates another career path for PE professionals and a competing talent pool for firms. - A 2022 survey revealed that an estimated 42% of processes within family offices still required manual intervention, a significant increase from 20% just three years prior. This operational inefficiency can be a frustration for talent accustomed to the more institutionalized infrastructure of larger firms. - While North American family offices report greater ease in retaining talent compared to recruiting, their counterparts in the Asia-Pacific region face the opposite challenge, struggling with retention more than hiring. European family offices report difficulties with both.
