But attracting top investment talent won’t come easy, and family offices will have to overcome negative impressions and offer major concessions, Greg Coules, director and head of the Family Office and Endowment practice for New York–based Hunter Advisors, told Family Wealth Report.

Three-quarters of senior analysts and portfolio managers surveyed by Hunter said they have never spoken to a family office about employment, while 90 per cent said they would be interested in exploring opportunities at family offices.

But hedge fund professionals also expressed major concerns about the long-term compensation, professionalism and career opportunities at family offices.

The role of the family itself  and “the potential for nepotism, the involvement of unqualified family members, the role of family politics and a lack of autonomy and transparency" were also serious concerns, according to Hunter’s white paper The Search for Talent: Family Offices.

Family offices which want the best managers will have no choice but to pay up, even if it means paying a new chief investment officer two or three times what the next employee makes, Coules said.

The average compensation for family office CIOs is between $600,000 and $800,000, according to the Hunter study, and the best money managers can make well over $1 million, Coules said.

Base salaries start at $200,000 to $300,000, he added.

The best way for family offices to attract and keep top investment talent was to “pay them according to performance,” Coules said.

Families might measure a CIO’s performance against an index such as the Nacubo endowment index or pay an incentive bonus based on a percentage of how much alpha they were able to generate.

Top managers also want the ability to make direct investments, Coules said.

“These are people who take a lot of pride in what they do and they want to be able to express their opinions freely,” he noted.

Families should also consider limiting, or even precluding, access to the CIO from family members who are unsophisticated investors.

“They don’t want to be bothered by family members who take up their time,” Coules said. “Family offices may want to have a mandate that the CIO only reports to the family patriarch.”

“Senior investment professionals need to work in professional environments that protect their work from the internal vicissitudes of the family,” the Hunter white paper stated. “Autonomy, protection from nepotism and unwarranted involvement from unqualified family members are necessary components of a professional culture at a family office.”

And family offices may have to consider beefing up staff size and infrastructure.

“A big trend” among family offices with  sizeable assets, Coules said, is to establish internal trading desks and gain access to institutional sell-side coverage and get better trading execution, research and other resources.

“A lot of family offices can get institutional coverage and this is what hedge fund guys are used to,” he said.

But the hiring equation isn’t all one-sided, and family offices have some formidable attractions of their own. For example, in a post-2008 world, the long-term stability of a family offices’ capital has become increasingly compelling, as has the job security.

Investment professionals surveyed by Hunter “were deeply interested in the opportunity - even the need - to think beyond monthly or quarterly numbers toward the long-term growth of family assets,” according to the study.

“It’s a captive pool of capital,” Coules said. “It’s going to be more sustainable than other business models and today that is an attractive selling point.”

Another attraction may be working with a renowned family patriarch.

“Working with someone who is enormously successful can be alluring,” Coules noted. “But both parties have to have a real understanding that it’s a collaborative process and there has to be good chemistry and it has to be a good cultural fit or it won’t work.”