It pays to be chief investment officer at a US family office.
The private investment firms of ultra-wealthy Americans have the greatest number of money managers in that role earning at least $1 million a year or the same total in other currencies, according to a report from KPMG and recruitment firm Agreus Group.
About 40% of CIOs for US family offices are paid that much annually, while 17% of those in Asia earn more than 1 million Singapore dollars ($740,000) and 6% in Europe make at least €1 million ($1.1 million). None hit the top rank in the UK, Middle East or Australia, according to the report, which was released Tuesday and based on surveys of 625 family office professionals.
By comparison, the total average annual compensation of CIOs at US nonprofit endowment funds was $800,000, according to a 2023 post from the University of Missouri, or roughly three times more than their peers at public pension funds. On a global level, chief investment officers with a CFA charter reported total average pay of $240,000 a year, a 2019 study by the CFA Institute found.
“In the US, the mindset and culture is they’re prepared to pay for the best,” said Paul Westall, co-founder of London-based Agreus. “Family offices there are more advanced compared to some other countries, and they’ve often already been through the ups and downs of trying to save costs.”
Executives Exiting
Family offices are loosely regulated entities that mange the investments, tax affairs and philanthropy for the world’s super-rich. They’ve boomed in number worldwide over the past two decades as billionaires have added trillions of dollars to their combined net worths.
The explosion of wealth has also led to a surge in finance professionals exiting institutional firms to work at family offices.
Dawn Fitzpatrick, a former UBS Group AG executive, is CIO for George Soros’s namesake investment firm, while ex-banker Daniel Forman joined Tony James’s Jefferson River Capital late last year in the same role. Erin Riley, who previously worked for Goldman Sachs Group Inc., moved to Bob Shaye’s Lemoko family office in 2022.
Read more: How New Wealth, Few Rules Fuel Family Office Boom
About a third of the world’s 500 richest people are in the US, according to the Bloomberg Billionaires Index. Roughly 12% of the family offices included in the survey managed more than $5.1 billion. New York, California and Texas are the most popular locations for US family offices, which also led globally in awarding employees long-term incentive plans to help retain staff.
“Alignment of interest is becoming a big thing for family offices,” said Tayyab Mohamed, Agreus’s other co-founder and head of the firm’s US market. “It’s almost a compulsory obligation if you’re trying to attract talent from the biggest private equity firms and banks.”