In our previous article, “Is Your Family Office Built for Your Investment Strategy?”, we explored how evolving investment strategies are placing new demands on Family Office governance and organisational structures.
Research from Agreus and KPMG for the 2025 Global Family Office Compensation Benchmark Report, helps illustrate this shift. It found that 68% of Family Offices now combine direct investments with fund commitments, while 23% participate in co-investments. Yet 16% have just one person on their investment team, a further 11% outsource investment management entirely, and 51% have no formal ROI benchmark in place. Together, these findings suggest that, for many Family Offices, organisational capability has yet to catch up with increasingly sophisticated investment strategies.
Traditionally, investment management within many Family Offices was once largely a matter of selecting the right external managers and monitoring their performance. Increasingly, that approach is no longer enough. We are seeing more families bring investment expertise in-house, and in doing so, reconsider how their Family Offices are structured.
A changing approach to investment management
As family portfolios have grown in scale and complexity, so too have the demands on those responsible for managing them. Allocations to private markets, co-investments and direct holdings now sit alongside traditional public-market exposure, each bringing its own requirements for due diligence, structuring and ongoing oversight.
The data points in the same direction. Citi's 2026 Global Family Office Report describes private markets as "a strategic pillar of Family Office portfolios", with direct investing continuing to increase. Asia Pacific recorded the highest direct-investing participation rate globally, at 79%. The picture is not uniform, however. In Europe, the Middle East and Africa, only 25% of respondents plan to increase their direct investment. Appetite varies by region and by family, which is precisely why the right level of internal capability is a decision each office needs to make deliberately.
Why internal expertise is growing
Several factors are driving this trend.
Greater control over investment decisions. An in-house team gives the family greater influence over how capital is allocated, rather than relying entirely on the recommendations of external advisors.
Faster decision-making. Direct investment opportunities are often time-sensitive. A team that understands the family's priorities and has the authority to evaluate opportunities quickly can respond with greater confidence and agility.
Increased direct investment activity. As Bloomberg has reported, direct investing has become increasingly popular among family offices, accounting for a growing share of their portfolios. More direct deals mean a greater need for professionals who can source, analyse, negotiate, and monitor investments.
Better alignment with family objectives. Internal professionals work towards the priorities of a particular family, making it easier to reflect objectives such as intergenerational wealth preservation, impact-led investing, or a particular risk appetite in everyday decisions.
Stronger oversight of complex portfolios. Dedicated in-house professionals can provide greater visibility across increasingly complex portfolios, helping identify concentrations, overlaps and risks that are harder to see when responsibility is fragmented.
Taken together, these drivers reflect a broader shift towards more sophisticated investment management. Citi's regional commentary on its 2026 findings describes a landscape increasingly defined by "institutional-quality investment practices", with internal expertise playing an important role in supporting this development.
However, building capability does not necessarily mean bringing every function in-house. The priority is ensuring the Family Office has access to the right expertise, governance and oversight for its investment strategy.
Building a strong investment function
Establishing an internal investment function requires deliberate decisions across several areas.
Recruiting specialist investment professionals. Appointing a CIO and building an investment team is costly, which makes getting each appointment right all the more important. Indeed, families need professionals whose experience matches their strategy, whether in private equity, real assets, venture, or public markets. Cultural fit is equally important. These professionals must be able to operate effectively within a Family Office environment, where decision-making, relationships and expectations can differ significantly from those of larger institutions. Read our Complete Guide to Cultural Fit for a deep dive into finding the exceptional talent who fit in perfectly at your Family Office.
Defining governance. Alongside having the right people, clear mandates, decision-making authority, and escalation processes are essential. This may include establishing investment committees, developing investment policy statements, and creating frameworks for how decisions are proposed, challenged, and approved.
Balancing internal teams with external advisers. Few Family Offices need, or should aim, to replicate every institutional capability. The most effective operating models make deliberate decisions about which functions belong within the Family Office and which are better accessed externally.
Core strategic responsibilities, such as setting investment priorities, making final decisions and maintaining oversight of the wider portfolio, often benefit from remaining close to the family. Highly specialised requirements, including niche asset class expertise, complex structuring or additional research capacity, may be more efficiently supported by trusted external partners. The right balance will change as the Family Office evolves, so it should be reviewed regularly rather than set once.
Ultimately, building a strong investment function is about creating the capability to increasingly sophisticated strategies over the long term. Success depends on aligning people, governance and operational structures with the family's investment ambitions, and on recognising that these elements must evolve together.
Ready to build your investment team?
The strength of an in-house investment function ultimately depends on having the right people, supported by an appropriate organisational structure. Agreus has led numerous investment hiring mandates for Family Offices, with our global network spanning the UK, USA, Singapore and the UAE. This gives us access to experienced investment professionals who may not be visible on the open market.
Whether you are appointing your first Chief Investment Officer, adding direct investment or private markets specialists, or restructuring an existing team, we can help you find, assess and secure the right talent. Speak to Agreus today about your next investment hire.