The Future of the SFO and theRole of the CIO

1© Pepper International 2015

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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About Pepper International

Pepper International sets up family offices around the world.

Carol acts as an External Chief Investment Officer to select Carol 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 Private named 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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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 matterP t hi

AssetManagers

• No clear picture of assets

• No control of over time and money

• Difficult to make decisions

PartnershipManagers

Difficult to make decisions

Legal &Accounting

Ad i

Client

OtherFamily

MembersAdvisors

Other

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Experts

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 assets Reporting system gives a clear picture of assets

• The family has control of time and money

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The Chief Investment Officer

AssetManagersMa age s

OtherFamily

Members

ReportingSystemClient

CHIEF INVESTMENTOFFICEROFFICER

Legal &Accounting

Advisors

Other Experts

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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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When is the Internal Model appealing to wealthy families?

Why insource the Chief Investment Officer Function

• Families with over $500 million of investable assets usually Families 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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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 and Many 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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The CIO Should Provide a Clear Overviewof Family Wealth

Families Want Tailored Solutions

• Each family has a unique set of investments cash needs Each 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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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 SelectionDocumentation Co-Investment

Manager selection Storage of documents Deal Flow Networks

Manager oversight Consolidated Reporting PartnershipOpportunities

Risk monitoring PerformanceM t Unique Investmentsg Measurement q

Market Crisis management Customized Benchmarks Market Intelligence

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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 il changing the type of CIO that will work best for the family

office

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What are the benefits of working with the right CIO for the family?

SuccessInvestments are well managedInvestments are well managedPlans are executedGoals are achieved

Costs are controlledRisks are understood and addressed

Control

Time is well managed

ClarityClarityA clear vision of the future of the family is createdA thoughtful plan is executed to achieve the

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g pvisionA legacy is created to last generations

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 & FounderPepper International311 East 72nd Street, Penthouse CN Y k NY 10021New York, NY 10021

Telephone: 212.472.7596

Cell Phone: 917.923.6053

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For more information about the Imarcus evans Investments 

Summits series: investmentseries@marcusevanscy.co

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