In our new world of Investment version post 2008 , we all need to understand Heisenberg ‘s Uncertainty principle. Heisenberg ‘s study was focused on the movement of sub atomic particles. He found he could not measure all variables all of the time. Trying to calculate all of the variables together became futile. His lesson remains an important one for finance professionals. We now need to know so much more and quickly.
In this more contemplative and reconstruction state, the skill sets that have been in demand are asset allocation, senior manager selection and risk management. Family offices, like other asset owners such as pension funds, have been actively looking to bring more expertise in-house to buttress their asset allocation and related investment decisions and be less dependent on third parties. Bringing in additional senior skill brings with it a host of critical decisions, namely what values does the family office want to hire?
Of primary interest are individuals with a highly evolved sense of fiduciary management, unquestionably strong ethics, and critically, an ability to communicate bad news. Family offices do not want just another person to fill a seat. Some searches in this sector can happily take nine to 12 months to reach the right hiring decision. This can be time well spent. The right candidate will stay for years.
John Gent, a founding father of Lord North Street adds further colour to the quest for hiring for family office. He said: “The true test of a good fiduciary is that he applies his skills to pose the right questions on behalf of the client as if he was making that investment for themselves rather than for the purpose of identifying how best to sell the investment to the client.”
Also in demand are those who are passionate about the markets. Groups do not want to hire a “know- it- all.” If ever there was a moment to hire proactive individuals who want to engage in robust debate, it is now. However, good ones investment ideas family offices also need people who can implement these ideas quickly. But what of risk management as a skill set, clearly that is important to have on board after in the experiences 2008 wrought?
Adherence and attention top risk management brings a new dimension to the skills we seek in recruiting for family offices. Industry commentator Professor Amin Rajan of CREATE Research commented: “ Due a series of shockwaves we no longer manage risk... we manage uncertainty.”
