Building a direct investment team: size, cost and skills

A direct investment team that can originate, underwrite and monitor private deals without relying on a fund manager typically needs at least three investment professionals, and the published data suggest most family offices run leaner than that. Morgan Stanley and Botoff Consulting's 2025 Single Family Office Compensation Report found that single family offices average 19.5 in-house staff across all functions, falling to 8.5 for offices below $1bn. BNY Wealth's 2025 survey found 58% of single family offices have fewer than 20 employees in total, and 44% of US offices named understaffing as a key challenge in direct investing, an 83% rise on the prior year.

How large investment teams actually are

The Morgan Stanley report, based on 433 firms surveyed between June and August 2024, gives the clearest headcount data. Offices with more than $1bn of assets averaged 29.8 in-house staff. Investment-focused offices, a subset of 113 firms, averaged 17.5. Those totals include accounting, legal, administration and family services, so the investment team is a fraction of them. The same report found 56% of investment-focused offices manage investments in-house, against 44% of all offices, according to the Business Wire summary.

J.P. Morgan's 2026 Global Family Office Report, summarised by Gulf Business, named "overly lean staffing" as a risk and found that 80% of offices outsource some portfolio management, with over a third of offices above $1bn outsourcing more than half of their portfolios. BlackRock's 2025 survey of 175 single family offices found gaps in internal expertise around deal sourcing (63%) and private market analytics (75%).

What the roles cost

Source: Morgan Stanley and Botoff Consulting, 2025 report.

Size changes the numbers substantially. Median CIO total direct compensation was $1.1m at offices above $1bn and $586,153 below. Trish Botoff told CNBC in 2024 that CIO pay is "about $1 million" under $1bn of assets and "just under $2 million" above $10bn. KPMG and Agreus' 2025 Global Family Office Compensation Benchmark Report, drawn from 585 professionals, put the most common UK CEO salary band at £198,001 to £264,000 and the US band at $396,001 to $500,000.

A three-person team of a CIO, an associate and an analyst therefore costs in the region of $1.3m a year in direct compensation at median US levels before benefits, systems, legal spend and deal costs. That compares with total operating costs that CNBC reported from J.P. Morgan's 2024 research of $1.5m a year for offices under $500m and $6.1m above $1bn.

Long-term incentives

Fixed pay alone rarely retains people who could earn carried interest elsewhere. Morgan Stanley's 2025 report found 54% of all single family offices and 62% of investment-focused offices use long-term incentive plans, rising to 71% of investment-focused offices above $1bn. Co-investment opportunity (57%) overtook deferred incentive compensation (56%) as the most common plan type. Where carried interest or phantom carry is used, pools "range from 10% or less to at or near a traditional private equity level of 20%". The design choices are covered in long-term incentives and carry in family offices.

A minimum viable team

The surveys point to the same conclusion: a credible direct programme needs a senior deal lead, at least one execution professional and analytical support, plus access to legal, tax and sector expertise that can be bought in. An interviewee in Campden Wealth's 2025 North America report said warm leads come almost entirely from other family offices, which makes the senior lead's network part of the job specification. Institutional Investor reported one principal whose office takes three to six months to produce a sector white paper before investing, and another who wound down direct deals because "We just weren't getting paid for the time we were investing."

Offices that cannot justify three full-time professionals have two alternatives: restrict direct activity to co-investments alongside managers who do the underwriting, or use an outsourced CIO for the fund book and keep a small in-house team for a narrow set of sectors. Both routes are compared in outsourced CIO versus in-house, and full pay benchmarks are in family office compensation 2026.