This document discusses the role of the Chief Investment Officer (CIO) in family offices. It notes that a CIO can help by providing a single point of contact, creating an investment process, managing costs, and giving families a clear picture of assets through reporting. The document explores whether an internal or external CIO is best based on factors like family wealth size and asset types. It outlines key CIO roles in processes, performance, and strategy. Finally, it discusses how technology and generational transfer may change the CIO role in the future.

1. The Future of the SFO and the
Role of the CIO
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© Pepper International 2015

2. Our Topics Today
• About Pepper International
• The CIO and the Set Up of a Family OfficeThe CIO and the Set Up of a Family Office
• How to Choose the Right Type of CIO- Internal Versus External
• The Top Three Roles for the CIO in Running the Family
Offi P P f d SOffice- Process, Performance and Strategy
• The Future of the CIO’s role in the Family Office- technology
and generational transfer
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3. About Pepper International
Pepper International sets up family offices around the world.
Carol acts as an External Chief Investment Officer to selectCarol acts as an External Chief Investment Officer to select
single family offices and families.
The firm has won numerous awards. In 2015, Carol was
named one of the 50 most influential women in Privatenamed one of the 50 most influential women in Private
Wealth.
Carol speaks at conferences around the world on topics
of interest to wealthy families.
Carol appears as a financial expert in the media, including
CNBC, Fox Business and Yahoo Finance.
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4. The Client without a Chief Investment Officer
• Client must juggle many contacts
• Specialists are uncontrolledSpecialists are uncontrolled
• Costs are not well controlled
• Client involved in every matter
P t hi
Asset
Managers
• No clear picture of assets
• No control of over time and money
• Difficult to make decisions
Partnership
Managers
Difficult to make decisions
Legal &
Accounting
Ad i
Client
Other
Family
Members
Advisors
Other
4
Experts

5. The Family with a CIO
• The family has one point of contact
• A professional investment process is createdA professional investment process is created
• Investment decisions are documented
• Portfolio Managers are managed
• Costs are controlled
• The family chooses level of involvement
• Reporting system gives a clear picture of assetsReporting system gives a clear picture of assets
• The family has control of time and money
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6. The Chief Investment Officer
Asset
ManagersMa age s
Other
Family
Members
Reporting
SystemClient
CHIEF
INVESTMENT
OFFICEROFFICER
Legal &
Accounting
Advisors
Other
Experts
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7. The CIO and the Set Up of the Family Office
What Type of CIO Do You Need?
• SIZE: How large is the pool of assets?SIZE: How large is the pool of assets?
• ASSETS: What is the predominant type of investment?
• Geography: How international is the portfolio and the family?
• Environment: What type of personality do you want?
• Make a SAGE decision by considering these factorsMake a SAGE decision by considering these factors
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8. When is the Internal Model appealing to wealthy
families?
Why insource the Chief Investment Officer Function
• Families with over $500 million of investable assets usuallyFamilies with over $500 million of investable assets usually
choose an internal CIO- it is a luxury they can afford
• Families with primarily real estate or direct deals usually
have an internal staff for these investmentshave an internal staff for these investments
• Families with many entities find an internal CIO better suited
to their needs
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9. When is the External Model appealing to wealthy
families?
Why outsource the Chief Investment Officer Function?
• Many families want strong in-house staff for accounting andMany families want strong in house staff for accounting and
bill paying purposes but realize it is not cost effective to
have an in-house staff for investments
• The size of the family wealth or the single family office may• The size of the family wealth or the single family office may
be better suited to an outsourced CIO
• Families and SFOs may feel that some investment consultants
are too big and impersonal to address their needs.
• Families know they need stronger investment guidance but
don’t need full time help.
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10. The CIO Should Provide a Clear Overview
of Family Wealth
Families Want Tailored Solutions
• Each family has a unique set of investments cash needsEach family has a unique set of investments, cash needs,
long- term goals and pressing challenges so each requires a
unique solution
• Each CIO solution should be crafted to bring the best experts• Each CIO solution should be crafted to bring the best experts
available together to work as a team to fulfill the family’s
requirements
• A reporting system should create a clear picture of assets and
performance for easy monitoring of investments
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11. Chief Investment Officer Roles: Process,
Performance and Strategy
The Role Of the CIO
Process Performance Strategy
Markets Analysis Investment Policy Deal Analysis
Asset Allocation
Investment Selection
Documentation
Co-Investment
Manager selection Storage of documents Deal Flow Networks
Manager oversight Consolidated Reporting
Partnership
Opportunities
Risk monitoring
Performance
M t
Unique Investmentsg
Measurement
q
Market Crisis
management
Customized Benchmarks Market Intelligence
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12. The CIO of the Future: Technology and
Generational Transfer
What’s Next?
• Next Gens will demand a tech savvy CIONext Gens will demand a tech savvy CIO
• Technology will further enhance CIO decision making
• Alpha Generation will be found in the private markets,
h i h f CIO h ill k b f h f ilchanging the type of CIO that will work best for the family
office
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13. What are the benefits of working with the right CIO
for the family?
Success
Investments are well managedInvestments are well managed
Plans are executed
Goals are achieved
Costs are controlled
Risks are understood and addressed
Control
Time is well managed
ClarityClarity
A clear vision of the future of the family is
created
A thoughtful plan is executed to achieve the
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g p
vision
A legacy is created to last generations

14. To Contact Pepper International
Website: www.pepperinternational.com
Email: carol@pepperinternational.com
M ili Add C l P CEO & F dMailing Address: Carol Pepper, CEO & Founder
Pepper International
311 East 72nd Street, Penthouse C
N Y k NY 10021New York, NY 10021
Telephone: 212.472.7596
Cell Phone: 917.923.6053
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15. For more information about the
Imarcus evans Investments
Summits series:
investmentseries@marcusevanscy.co
mm