RSR Partners, a leading board recruiting and executive search firm, announced that Edward D. C. Fowler (“Ed”) has been named Co-Head of the firm’s Asset Management practice, alongside current Co-Head, Maryann Bovich, effective immediately. Ed is an exceptional recruiter with more than 30 years of search experience and a track record of developing and leading relationships with top investment firms and allocators across the United States.

“Ed has a great reputation in the endowment and foundation community,” said Brett Stephens, Chief Executive Officer of RSR. “His authentic long-standing relationships with prominent and respected institutions drive Ed’s success in delivering outstanding leadership and talent for our clients.” Stephens continued, “That success has been foundational to our position as the go-to firm in the asset management arena.”

Ed primarily works with endowments, foundations, family offices, and OCIO firms. He recruits CIOs and also helps build out their teams. Additionally, Ed recruits both investment and institutional sales professionals for a variety of direct investment firms.  His resume also includes numerous COO, risk, and general counsel searches for his clients.

“We have a uniquely talented team that consistently brings innovative strategies and a hands-on approach to identifying people who enhance all aspects of our clients’ performance, relationships, and culture,” said Ed. “I look forward to serving in a leadership role as we continue to grow our specialized practice known for its bespoke, client-focused search process.”

Ed joined RSR Partners in 2017, when the firm acquired Higdon Partners to broaden its reach in the asset management community. Prior to Higdon, Ed was an entrepreneur. He founded and ran his own recruiting firm focused exclusively on asset management and co-founded a successful recruiting-related software start-up. Early in his career, he worked at the prominent law firm Wachtell Lipton. Ed graduated from Vanderbilt University with a BA in political science and later earned an MBA from the University of Virginia’s Darden School of Business.

About RSR Partners

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1993 by industry icon and Chairman Emeritus, Russell S. Reynolds, Jr. Over the past 30 years, the firm has conducted thousands of projects for Boards and CEOs at public, private equity owned, and family-owned businesses across a range of industries including asset management, consumer markets and enterprises, financial services, healthcare, industrial, and technology.

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Contacts
Lindsay Griesmeyer
+1 (203) 618-7076
media@rsrpartners.com     

The role of the Chief Financial Officer in family offices has become more complex and consequential. Far beyond traditional financial oversight, today’s CFO is a strategic partner, tasked with preserving and growing multi-generational family wealth and legacies. While the specific needs of each family office will vary, we’ve observed several key characteristics that are consistently prioritized in the search for today’s ideal CFO.

With more than three decades of experience advising family offices, our team has witnessed a clear and growing shift: the demand for strategic CFOs is accelerating. This trend is particularly pronounced in family offices, whether newly formed or well-established, as they look to increase their assets, prepare for succession, or elevate their operational capabilities.

The Evolving Role of the Family Office CFO

The modern family office CFO must combine deep technical expertise with a nuanced understanding of the interpersonal dynamics unique to family environments. Identifying the right leader for this multifaceted role is no longer just about financial acumen—it’s about finding someone who can navigate complexity, provide long-term strategic vision, and build trust across family generations. From managing intricate investments, tax strategies, and regulatory compliance, a skilled CFO provides centralized oversight to reduce risk and ensure transparency.

Their impact is particularly significant during succession planning, where wealth transfer brings challenges like tax optimization and family governance. CFOs design strategies that preserve both assets and family values, while also guiding philanthropic efforts to align financial resources with legacy goals. By educating family members and simplifying complex financial matters, CFOs foster harmony and create governance structures that sustain long-term wealth.

As family offices embrace digital transformation, CFOs are now leading the adoption of new technologies, including AI, to streamline operations and enhance decision-making. Leveraging data analytics, they uncover trends, optimize portfolios, and strengthen cybersecurity, ensuring families remain competitive and secure in an ever-evolving financial environment.

What to Look for When Recruiting a Family Office CFO

Selecting a CFO is not about identifying a jack-of-all-trades but a professional whose expertise aligns with the specific needs and vision for the office. While technical proficiency in areas like financial planning, asset management, and compliance is a must, the most successful candidates also bring strategic vision and emotional intelligence to the table.  The endgame is finding someone that will have the unwavering trust of the family.  This is easy to say, but often difficult to achieve. However, we have found there are five core competencies that most family offices prioritize when evaluating and selecting their next CFO.

1. Cultural Fit: A family office CFO must align with the family’s values and integrate seamlessly into its culture. Unlike corporate settings, where professional detachment often prevails, family offices demand a high degree of trust and alignment with their unique ethos. A CFO must be able to build relationships based on discretion, respect, and a shared vision.

2. Strategic Vision: The ideal candidate combines technical proficiency with strategic foresight. Whether managing global investments, navigating complex tax structures, or leading ESG initiatives, a forward-thinking CFO adds significant value by aligning financial strategies with long-term family objectives.

3. Adaptability: Given the evolving nature of family dynamics and financial markets, a successful CFO must exhibit agility and a willingness to embrace change. This includes staying ahead of regulatory shifts, adapting to new investment opportunities, and guiding the family through transitions such as leadership succession or market volatility.  We have seen many successful family offices transition into full-blown asset managers. So, it is important for them to think about what is needed today but with an eye towards the future. By fostering a culture of continuous learning and improvement, CFOs can ensure that the family office stays ahead of the curve.

4. Interpersonal Skills: As the liaison between family members and external advisors, a CFO must communicate effectively across varied audiences. They should be adept at simplifying complex financial concepts for non-experts and facilitating open dialogue within the family.

5. Technological Expertise: In an era of rapid digital transformation, a tech-savvy CFO is invaluable. From streamlining operations with advanced systems to implementing robust cybersecurity measures, technology-driven innovation enhances efficiency and protects sensitive financial data. An experienced CFO who can leverage analytics and models for better decision-making is paramount.

How to Evaluate Candidates for the Role

Identifying and evaluating CFO candidates has become increasingly complex. While some family offices try to utilize their referral networks to find the right CFO, they are frequently unsuccessful when they haven’t created a “success profile” for how the role will help operationalize the vision of the office. As each family office is unique, a great CFO at one family office does not guarantee success at another.

We have found that families should prioritize a rigorous alignment, identification, and evaluation process that includes craft demos, scenario-based assessments, and in-depth interviews. For example, asking candidates to describe their experience with intergenerational wealth transfer or resolving family conflicts can reveal critical insights into their problem-solving abilities and interpersonal skills. Additionally, any formal and back-channel references should be scrutinized to ensure alignment with the family’s expectations for discretion and integrity. Given the sensitive nature of the role, a successful hire must inspire unwavering trust.

With decades of experience advising family offices, RSR Partners is uniquely positioned to help families navigate the complexities of this critical decision. Our specialized team understands that the perfect CFO is not a one-size-fits-all solution but a tailored match for your family’s unique needs and aspirations. We go beyond traditional recruitment by conducting a comprehensive assessment of your family office’s requirements. From understanding your family’s values and financial objectives to identifying the technical and interpersonal attributes necessary for success, our proven approach ensures that we deliver candidates who excel both professionally and culturally. Our experience, reputation, and existing network allow us to get the “real scoop” and back-channel references on almost any candidate.

If your family office is on this journey, we can help you identify a strategic CFO who will act as a catalyst for intergenerational wealth preservation and growth for the future.

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Brett Stephens, Lindsay Griesmeyer, Maryann Bovich and Ed Fowler are members of the Family Office practice at RSR Partners. RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1993 by industry icon Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity-backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare.

As mutual fund governance continues to evolve, selecting the right trustees is more important than ever. With over two decades of experience collaborating with well-regarded fund boards, we have identified some trends to consider when choosing your next trustee.

• Financial, Risk, and Regulatory Oversight – Trustees face increased regulatory demands for transparency and accountability. They must be aware of new compliance standards and proactively address risks related to issues such as liquidity and derivatives exposures. Qualified financial experts remain in high demand to bolster fund boards’ knowledge and understanding of complex financial statements and reporting requirements, as well as provide leadership potential for audit committees.

• Demand for Specialized Expertise – Today’s trustees require skills beyond traditional oversight. Investment products on fund platforms continue to grow in variety and complexity. To respond, boards need to add the right mix of trustees who bring functional expertise to the discussion in the boardroom. Areas of specialized skills and talents may include investments (both traditional and alternative); operational oversight; and knowledge of products and distribution platforms. These industry experts also help boards envision and prepare for “what’s coming around the corner.”

• Technological Knowledge – The use of technology is growing in all aspects of the fund industry—such as in the areas of investment process, financial and/or operational audits, and customer interface applications. Trustees must understand how technology is being utilized and assess its effectiveness. Oversight of service providers is also critical to consider any possible risks to delivery of services (such as a cyber-attack or leak of sensitive personal data). Boards have recruited technology expertise to keep up with these trends. 

• Fiduciary Responsibility and Accountability – Shareholders are now more engaged and vocal about their preferences and expectations. For mutual fund boards, trustees must understand the mindset of and role as a fiduciary advocating on behalf of those shareholders. This includes the responsibility to ensure clarity and transparency regarding fund strategies and performance. 

Trustee Search Tips

Recruiting mutual fund trustees has become highly competitive and great talent moves quickly! Based upon the most successful processes and outcomes we have witnessed, here are some recommendations for your next search:

• Start Yesterday – Effective boards recruit before an upcoming retirement. By developing a candidate pipeline well in advance of departures, boards are better able to manage transitions, provide useful overlap of trustees, and ensure effective on-boarding activities.

• Failing to Plan is Planning to Fail – Aim to recruit trustees with leadership potential. Avoiding succession planning may lead to future issues in board leadership.

• Add What You Need; Not What You Lost – With retirements, focus on current board needs and goals while recruiting new trustees. Open seats afford boards the chance to enhance skills and refresh in a non-disruptive fashion. Take advantage of that opportunity.

• Conflict Free – As always, and as soon as possible, it is critical to carefully select and ensure that potential trustees are truly independent and free from any conflict of interest.

• Diversity Matters: Prioritize Talent Over Title – Successful boards have a true mix of talents and abilities. They benefit greatly from the recruitment of a broad array of C-suite and senior leadership professionals with a variety of functional backgrounds and skills. Boards continue to work to capture diversity of thought and experiences to achieve a goal of building a more inclusive and representative culture.

The right trustees can future proof a board and strengthen its foundation. We are here to help you navigate these trends and recruit trustees who will add lasting value.

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Brett Stephens is the CEO of RSR Partners and helps lead the firm’s Board & CEO Services. Maryann Bovich is Co-Head of the firm’s Asset Management practice and Head of the Mutual Fund Trustee practice. 

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1993 by industry icon Russell S. Reynolds, Jr. In 2017, the firm expanded its capabilities in Asset Management through the addition of Higdon Partners. Over the past 30 years, the firm has conducted thousands of projects for Boards and CEOs at public, private equity owned, and family-owned businesses across a range of industries including asset management, consumer markets and enterprises, financial services, healthcare, industrial, marketing and digital, and technology. To learn more about RSR Partners, click here.

Leadership Strategies to Ensure the Office Remains Relevant to the Millennial Generation

Much has been written about millennials – individuals born between 1982 and 2004 – who are having a powerful, and sometimes disruptive, impact on organizations, both public and private. Summarizing current research, millennials are:

• Active users of social media
• Detached from tradition
• Less loyal to organizations
• Distrustful of the establishment, and
• Optimistic about a better future through innovation and impact

On its face, this profile suggests possible tensions with the stereotypical view of the family office as simply a vehicle to pass along both family wealth and the traditions of its creators. It also raises critical questions: Will different generations clash over an understanding of what a positive future looks like? Will they clash over how the family’s assets, financial and other, should be managed? Increasingly, family office leaders are expressing frustration over their inability to capture the attention and commitment of millennials. Not surprisingly, reigning leaders in family offices believe that when the baton is passed to the next generation, they will not value or understand the full benefits of collective management of a family’s legacy and wealth. This is no small matter when looking at the size and scope of the intergenerational wealth transfer expected to take place in the decades ahead.   

According to a recent article in Trust and Estates, millennials have surpassed baby boomers as the largest segment of the population. In the coming years, they will inherit more than $30 trillion.

It is a time-honored tradition for family offices to adjust their working model to meet the preferences of succeeding generations.  But will simple tweaks sufficiently address the needs of this disruptive generation and the massive wealth transfer that lies ahead?

Evidence suggests that radical changes are needed to integrate the millennials into the fabric of the family office.  

Today’s family office leaders are refining and reinventing their management strategies to fashion a high-performing office that can serve all generational needs and expectations. At the risk of generalizing about an industry that is well known for the unique structure of each office, three essential strategies have emerged from our research.

Strengthen Your Governance Policies

Reinforce the values that are unique to your family

Millennials appear to be more sophisticated about financial matters than prior generations, are skeptical of authority, and are impatient with dysfunction. This generation values governance structures that facilitate efficient and informed decision-making and candid dialog. Thus, it is essential for family offices to define the roles and responsibilities of each office executive and the charter for each committee. Who, within the family or among outside advisors, has control of which assets, and who has the authority to change existing arrangements? 

If a family governance process has been clarified to answer these questions and to address issues of control and money, this will serve as a means by which problems can be resolved before they become destructive. Make succession plans clear and establish expectations around when the younger generation might begin to assume a leadership role. Develop a budget and business plan for the office. Empower millennials as early as possible and assign them a project for which they will be held accountable. Engage them early and often. While millennial loyalty to institutions can be low, research suggests that they are more inclined to be loyal to individuals. If authentic relationships are developed between family members and office leadership through this work, a higher level of trust will ultimately form between generations. 

For an office to survive multiple generations, the family must have intention, focus, and clarity about its values. John Davis, founder of the Cambridge Institute for Family Enterprise, is a strong believer in families taking the time to reflect on their purpose, characteristics, needs, and aspirations in order to define their overall mission.

With a mission in hand and a strategy established to achieve specific goals, succeeding generations will have a road map in place to survive leadership transitions.  

This begs the question – what happens when the millennials challenge the underlying family values and mission? Industry guru James E. Hughes Jr. has identified a consistent thread among hundreds of international families who have successfully transitioned a family enterprise through multiple generations. These families have pivoted their focus from simply building a great business to building a mission-directed family that reflects the goals of the group. In so doing, they often come to recognize that the value of the family’s human capital is equal to or even greater than the value of their financial assets. To strengthen the bond, it might be useful to reflect on the “family glue” from time to time via candid dialog facilitated by an outside consultant. We highly recommend reading The Voice of the Rising Generation by James E. Hughes Jr., Susan Massenzio, and Keith Walker, where these ideas are explored more fully.

Embrace Transparency

Using technology and new forms of communication

Privacy has historically been the cornerstone of the family office, and families have typically been conservative about the information they provide to the younger generation. Millennials are disrupting this tradition. They share life experiences on Facebook, Instagram, Twitter, TikTok, and Snapchat etc. This poses risks for the families as reputations can be damaged and security concerns arise when millennials are careless about broadly exposing what they do with their lives.

The office head needs to accept the reality of social media and coach the younger family members on how to coach the younger generation to not share private information and to minimize security risk. 

This generation can be impatient; they don’t like to wait. This phenomenon is frankly a good thing; offices have accelerated the implementation of technology upgrades to provide financial data on demand. Millennials are avid networkers and attend conferences to communicate with other offices in the quest for “best practices.” They are virtual learners and like to teach each other. Because millennials have shorter attention spans, family office leaders must integrate new forms of communication such as diagrams, texts, white boards, dashboards, and summary documents, in order to achieve the desired impact. Forget long meetings, white papers, group conference calls, or thick legal documents. Consultants to families report that millennials prefer to receive information via podcast, allowing them to listen and learn when they choose, rather than the imposition of a meeting or conference call.  

In keeping with the tendency of millennials to be transparent about their life activities on social media, this generation wants transparency from the family about its wealth and how it will impact their lives. They want to be brought “under the tent” at a younger age. 

A challenge facing many families is whether younger members have the maturity to handle this information and when is the right time for them to take an active role. Additionally, as millennials are armed with more information about best practices at other offices, they may question whether the family office team is delivering top quality advice and performance. The stakes are high for family office leaders to demonstrate the worthiness of an independent office versus allocating family assets to institutional wealth managers. 

Understand the Quest for Impact

Learning how millennials view the world 

The millennial generation is optimistic about the future and believes that individuals can make a difference – to have social, environmental, and even financial impact on their world. But if you happen to be a millennial in the shadow of a “larger-than-life” patriarch, it can be a challenge to find your role to make that difference.  

The Voice of the Rising Generation addresses this subject both thoroughly and thoughtfully. How can succeeding generations find their “voice” and how can they lead meaningful lives? The authors encourage each family member to define his or her dreams, gain self-knowledge, and develop resilience and independence. 

Many who head offices recognize that empowering a succeeding generation is a life-long journey, and they devote a fair amount of time counseling younger family members on their social and emotional well-being. Some of the largest and most mature offices have created a new full-time position in the office, a Life Long Learning Specialist. The goal is to empower each family member, through shared learning experiences, to make an impact with the tools that are uniquely his or hers. The curriculum goes well beyond financial literacy.  

Millennials like to participate in direct private equity or venture investments rather than the more typical investment program where assets are allocated to third party mangers. To be directly involved in crunching the numbers, preparing spreadsheets, and researching industry trends, they feel they will have more impact on the success of the investment. Increasingly, they are involved in launching new entrepreneurial ventures in virtually every segment of the economy. Since millennials love social media and collaboration, it is not a surprise that they have led the growth of crowdfunding, a vehicle for peer-to-peer investment collaboration. Lastly, millennials are strongly behind the growth of social impact investing, where investments are evaluated through environmental, social, and governance lenses, better known as ESG. Such investments aim to achieve both financial returns as well as having a positive impact on society.   

Private family foundations are useful tools to help keep families together and actualize their shared mission. In fact, making an impact through charitable giving is every bit as important today as it has been in previous generations.

However, millennials approach charitable giving in ways that differ from their parents. In general, volunteering or “doing the work,” feels more satisfying to them than writing a check. Another defining millennial behavior is the desire to touch as many people as possible and to hold charities accountable for their promises. An observation made by an executive of the Silicon Valley Community Foundation that was reported in the the Journal of Philanthropy (9/14,2017) succinctly makes this point: “They want to know impact, scale, how many, and how come. They’re engaged to an extent that people of my generation find uncomfortable.” 

In Conclusion

The three strategies discussed above are designed to help family offices achieve the ultimate goal, which is to build trust with a generation that inherently questions tradition and distrusts the established way of doing things. 

As a family leader, ensure that the family mission is always top of mind, and create a governance structure that facilitates the execution of the mission, open dialog, and conflict resolution.                

Learn to communicate to millennials in ways that will reach them in meaningful and memorable ways.

Be ever mindful of the millennial desire to make an impact:  in investing, in philanthropy, and in their lives.  Nurture human capital as diligently as financial capital.

And keep the faith knowing that the millennials are optimistic about the future.  They are committed to making the world better – in their own unique, and sometimes unorthodox style.   

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Maryann Bovich and Ed Fowler are co-heads of the Asset Management practice. Their clients are traditional and alternative institutional investment firms, endowments, foundations, wealth management firms, and family offices. For all of these clients, they recruit talent in all functional areas including Trustees and all other C-Suite positions. Our dedicated Family Office team, focuses on attracting best-in-class C-Suite talent in the areas of general management, investment, operations, and client service, and has adapted to the profound growth and transformation of family offices nationwide over the past several decades.

Grateful. Thankful. Optimistic.

Given the turmoil in the world around us, we can’t help but be more reflective and thankful at this time of year. We are grateful for family and the relationships in our lives. We are thankful for our wonderful clients and those candidates with whom we have partnered. We are optimistic about the new year ahead of us.

As another successful year in search concludes and we look back on 2023, we are sharing below some observations made during the course of our work. We always welcome a conversation with you whether it’s a quick hello or to discuss any specific needs of your organization. Our team looks forward to staying in touch in 2024!

ENDOWMENTS, FOUNDATIONS, AND OCIOs

• Changing of the Guard – After three decades recruiting within the E&F community, it’s hard not to get the sense that the pioneers of the E&F approach are stepping back, and the voice of a next and very capable generation is being heard.
• OCIO Search – The OCIO market has become highly competitive and the ascent of the OCIO search firm as a critical gatekeeper in the space should not be ignored.
• New Territory – Indexing and passive beta are entering the lexicon and finding a home on the mainstream range as credible vehicles for investment.
• Generalist Model – Many clients are adopting generalist models for varied reasons, including better aligning the team with market opportunities – and also with GPs who more and more are blurring lines between traditional asset classes.

FAMILY OFFICES

• Dynamic Market – There has been robust activity with new offices spawning daily and established offices upgrading talent continually.
• Sophisticated Investment Platforms –There is an increasing focus on buying private operating businesses, thus making family offices the biggest competitors to middle market buyout firms.
• CPAs – The demand for top quality financial talent is increasing but CPAs are in short supply.
• Cohesion – A top of mind discussion in many offices is cohesion – how do you keep family generations together and focused on common goals?

MUTUAL FUND BOARDS

• Targeted Expertise – Given the variety and complexity of investment products on fund platforms, boards have a continual need for qualified financial experts and trustees with broad investment experience.
• Strategic thinkers – With the industry undergoing consolidation and experiencing increased regulation, fund boards are looking for strategic thinkers and proven investment leaders to help boards envision and prepare for “what’s coming around the corner.”
• Diversity –Boards continue to work to achieve a goal of building a more inclusive culture and encouraging diversity of background, experience, and thought in the boardroom.
• On-boarding – Mandatory retirements continue to create a dynamic recruiting environment. As boards think strategically about seamless transitions, trustees are being recruited earlier and are provided broader educational programs and formal orientations to assist with on-boarding.

OPERATIONS

• Upgrades – Clients continue to invest heavily in upgrading operational functions to better integrate workflow with the investment process – leadership roles as well as portfolio analytics, risk, and operational due diligence capabilities.
• Forward Thinking – Senior operations roles require a strategic mindset and a comprehensive understanding of investment strategy to better support investment decision making.
• Range – COOs today must be able to deal with a greater range of business, regulatory, and cyber/technology related issues.

INVESTMENT/WEALTH MANAGEMENT

• Client Portfolio Managers – Firms are investing in talent with a blend of client DNA and demonstrated investment acumen for an integrated sales/client service role, as well as proxy for the CIO and investment teams.
• Bench strength – Our clients continue to experience tremendous demand for bench strength, perhaps a lingering effect of the great resignation.
• Analytics & Digital Technology – Distribution and marketing functions are transforming through enhanced use of data analytics and technology, now seen as critical components to a successful sales and client service effort to grow and maintain assets.

REPRESENTATIVE SEARCH WORK

Finding the right Chief Investment Officer (CIO) for a family office has become more complex over the past several years. From our experience working with a wide range of well-established to newly developed family offices, we have found an interesting trend emerging among the most effective CIOs in the marketplace. While undoubtably investment acumen and intelligence are paramount, there are three leadership behaviors and characteristics we have found that ultimately determine the fit and success of a CIO within a family office.

• Ability to Connect and Engage: Family offices are unique in that they serve the specific needs and objectives of a highly successful and prominent family. A CIO must understand and align with the values and goals of the family to ensure that investment strategies and activities are tailored appropriately. This alignment helps in making decisions that not only generate returns but also resonate with the family’s long-term vision and ethical preferences. A CIO who understands and shares the family’s mission can more effectively lead, build, and motivate their team. This shared sense of purpose helps in creating a cohesive work environment where the team is committed to the family’s objectives.

• Ability to Learn and Adapt: For the CIO, continuous learning is fundamental to remaining effective, compliant, and competitive in a fast-paced and ever-changing marketplace. In our evaluation process, we have found it is imperative for the family to understand what information sources CIOs utilize and how they process and absorb information to develop knowledge and make decisions. We always seek to understand how a CIO responds and adapts to the environment and circumstances surrounding them and how they can realign their actions based upon new information.  

• Having Trust and Discretion: Competence is insufficient without character. As trust is the critical component in family offices, one’s moral quotient (MQ) is fundamental. The family needs to understand what values the CIO stands for and how they will lead and manage so that everyone is aligned. This is especially important in a context where decisions are deeply personal and can impact multiple generations. For many families, the family office is far more than a financial management entity; it is a custodian of the family’s reputation and legacy. Trust and discretion are essential in ensuring that this legacy is preserved and passed on to future generations in line with the family’s values and desired impact. 

Selecting the right CIO for a family office requires a careful balance of technical ability and personal qualities. The ideal candidate will align with the family’s vision and values, fit well within the unique culture of the family office, possess a mix of broad business skills and specialized expertise, and demonstrate strong leadership, strategic vision, and empathy. These characteristics will help ensure that the new CIO can successfully manage the family’s wealth and contribute positively to the family office’s long-term financial and non-financial goals.

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Brett Stephens is the CEO of RSR Partners and helps lead the firm’s Board & CEO Services and Maryann Bovich and Ed Fowler are co-heads of the Asset Management practice.

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1993 by industry icon Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity-backed, and family-owned businesses. The firm’s Asset Management Practice, which builds upon the legacy of Higdon Partners and its 30-plus years of experience, has become a premier asset management search and advisory team uniquely positioned to address the changing leadership needs of the $100 trillion asset management industry.

Over the past year there has been a notable increase in demand from RSR Partners’ clients for experienced professionals with established relationships in the venture community. Going forward, we anticipate that this demand will continue to grow, especially as venture funds’ dry powder is at historic levels.

Record Year for Venture Investing

Consider the landscape for all private investing over the last 10 years. According to Preqin, approximately $4.4 trillion was invested in both private equity and venture in 2020 compared to $1.7 trillion in 2010. In venture alone, emerging companies raised $130 billion in 2020, a 14% increase from 2019. Of note, the technology and health care sectors saw an increase in deal flow, driven in part by pandemic-related innovations. Instead of slowing down in 2020, venture capital funds set new records for deal activity and fundraising, and also turned in the second highest year for exit valuations with three of the top-10 tech IPOs of all-time (AirBnb, DoorDash, and Snowflake).

The Need for Stronger Teams

As institutions build up their exposure to venture, they must be mindful of shifting dynamics. Established venture managers account for over 70% of the fundraising, yet among that group the top decile managers remain difficult to access. Consequently, an organization building their venture portfolio today may need to tap new and developing managers where, according to Cambridge Associates, over 50% of the top performing funds can be found. The challenge is that venture has the widest dispersion of returns versus other asset classes. That discrepancy is expected to widen further, placing an even greater importance on recruiting investment teams capable of discovering and evaluating great emerging managers. While the challenge is not insurmountable, it requires the right team and a thoughtful approach. For example, we have learned of success from teams who have identified venture funds that are not household names but focus on technology investments that solve problems. Adding to the complexity of finding the best managers, the explosion in the number of SPACs (special purpose acquisition companies) being formed will challenge the best of the venture players. Sitting on billions of cash, SPACs will compete with funds to find the best deals and funds may have to pay up to participate, thus impacting their returns.

E&Fs and Family Offices Fuel the Growth

Endowments, foundations, outsourced CIOs, and family offices have been steadily increasing allocations to private investments and contributing to the explosive growth in venture capital. As noted in a Nonprofit News Special Report, the outperformance of private equity (+2%) and venture investments (+4%) versus the public markets in recent years is driving this trend, with that outperformance being far greater for the top quartile managers. Larger endowments have outperformed their smaller peers due to significant exposure to private markets. Those with more than $1 billion in assets under management averaged a 13.6% allocation to buyout and 9% to venture, compared to 6.2% and 2.2%, respectively, for all endowments. Brown University, which is overweight in venture, generated a strong fiscal 2020 return of 12%, making it the top performer in the Ivy league for the second year in a row.

More than 80% of family offices invest in venture and buyout funds, and 63% of family offices expect their venture allocation to remain the same or increase, according to a Campden Wealth survey. A survey of over 100 family offices showed an average venture allocation of 10%, split equally between direct investments and funds. When investing directly, family offices typically invest alongside other family offices or through co-investment vehicles. As our family office clients continue to increase their allocations and refine their approach, many are emphasizing the development of in-house venture investment talent.

Increasing Gender and Geographic Diversity

A notable trend is the increase in deal activity for female-founded companies. Reports show that 25% of venture investments in 2020 went to companies with at least one female founder. We have also seen this trend reflected in recent mandates as clients specifically seek gender diversity on their private investment teams. And while Silicon Valley remains the epicenter for venture investing, studies show its share of total deal value has consistently decreased over the last decade. New York and Boston continue to be leaders for FinTech and BioTech respectively, with emerging hotspots that include Austin, Atlanta, Chicago, Denver, Los Angeles, Minneapolis, and Seattle, locations where RSR has directly seen recruiting activity for venture talent.

Evaluate Talent with Wide Peripheral Vision

There is no doubt that the venture capital talent universe will become more competitive and the high demand for exceptional investment talent will continue to grow into 2021 and beyond. RSR approaches each search with wide peripheral vision in order to identify exceptional talent. One recent mandate for a prominent multi- billion-dollar foundation on the West Coast resulted in the hire of an experienced direct venture investor. Given the scarcity of venture talent, some institutions are pursuing less-seasoned candidates with high-growth potential. According to a Managing Director at a premier endowment, “Venture fund partners are younger and younger, and people allocating to these funds seem to be getting younger as well.” Our challenge, from a search and talent perspective, is to identify that next generation of “up-and-comers,” as well those who have “already arrived” and can lead an effort today. We are excited to have a front-row seat in the community and to be in a strong position to further assist our clients in the build-out of impactful investment teams.

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About Our Asset Management Practice

The Quest for Venture Talent was authored by RSR Partners’ Asset Management practice and is based on recent experience performing searches for investment professionals on behalf of a variety of clients, including private foundations, family offices, and endowments. Please contact us for more information about our experience, capabilities, and for a consultation on how we can help with your talent needs.

RSR Partners is a boutique professional services firm headquartered in Greenwich, CT, that specializes in helping Boards and CEOs with their most critical recruiting, selection, and succession needs. The firm was founded in 1994 by industry icon, Russell S. Reynolds, Jr. The firm has conducted thousands of projects for Boards and CEOs at public, private equity backed, and family-owned businesses across a range of industries including asset management, consumer goods and services, industrial, technology, and healthcare. To learn more about RSR Partners, click here.