Swiss pension funds, insurers and family offices manage enormous assets. At the same time, their investment universe has become significantly more demanding in recent years. Private markets, more complex portfolios, risk management, new interest-rate regimes and geopolitical uncertainty pose investment teams with challenges very different from those of ten or twenty years ago.

“A good CV does not yet make a good institutional investor.”

The professionalisation on the investor side is therefore well advanced. But as complexity grows, so does the importance of a question that is often underestimated: Which are the right talents to steer these assets through the market phases ahead?

Many applicants – few truly suitable profiles

At first glance, the starting point for institutional investors seems comfortable. Especially in the current market environment, pension funds, insurers and family offices are sometimes receiving a large number of applications from candidates with backgrounds in banks and asset managers.

But a good CV does not yet make a good institutional investor.

The requirements differ significantly. It is not only a matter of understanding individual asset classes. Good investment decision-makers must be able to assess an overall portfolio, have experienced different market phases and know how risk, liquidity and long-term obligations interact. With the growing share of private equity, private credit, infrastructure and other alternative investments, additional specialist knowledge is required.

And they must be able to make decisions when markets are not moving in just one direction.

After many years of relatively favourable capital market conditions, the environment has changed. Interest rates, inflation, geopolitical conflicts and higher volatility are confronting investors with new challenges. Experience from different market cycles is therefore once again gaining value.

Expertise alone is not enough

In our experience, the personal side is at least as crucial.

How does someone make decisions under uncertainty and pressure? How does the person handle responsibility? Can they present complex issues in an understandable way to a foundation board, an owner family or an investment committee? Can they lead a team — and at the same time critically challenge external asset managers?

“Candidates from banks and asset managers sometimes come from a completely different environment — including in terms of remuneration.”

And above all: Does their attitude fit the organisation?

Candidates from banks and asset managers sometimes come from a completely different environment — including in terms of remuneration, speed and corporate culture. Moving to a pension fund or family office can be highly attractive. But in the long term, it only works if not only the technical skills, but also motivation, expectations and personality are a match.

Pension funds in particular have a structural disadvantage here: they often cannot compete with the compensation packages offered by large banks or international asset managers.

On the other hand, they can score with different arguments: long-term responsibility, broader areas of responsibility and, last but not least, a certain social relevance of their work in relation to occupational pensions.

This can be attractive for experienced investment specialists who consciously want to leave a strongly bonus-driven environment and are looking for meaning in their profession.

“The right appointment can go far beyond a single personnel decision.”

That is why the selection process is often more demanding than the number of incoming CVs suggests. In particular, in view of the criteria mentioned above, these are difficult to assess and challenge objectively.

Selection becomes an investment topic

Over many years, we have supported pension funds, insurers, family offices and other institutional investors in building and further developing their investment teams.

Time and again, one thing becomes clear: the right appointment can go far beyond a single personnel decision. It influences investment processes, governance, manager selection, team culture and, ultimately, an organisation’s ability to implement its investment strategy consistently.

An external perspective can therefore be particularly helpful when many seemingly suitable candidates are available. The focus should not only be on the question, “Can this person do the job?” but also, “Are they the right person for exactly this organisation and its next ten years?”

Must every skill be available in-house?

At the same time, institutional investors face a second strategic question: Which capabilities must actually be built within the organisation?

In particular, smaller and medium-sized family offices can hardly employ their own experts for every asset class and every specialist discipline. Private markets, manager selection, currency hedging, risk management and portfolio analysis increasingly require specialised know-how.

Here, the topic of OCIO (Outsourced CIO) is likely to gain importance in continental Europe as well. Instead of building up all competencies internally, investors can cover selected investment functions or parts of portfolio responsibility with specialised external partners.

“What is needed are investment specialists, but equally people with a clear opinion.”

This is not a substitute for a strong internal investment team and should not be seen as competition either. On the contrary: what will matter is which competencies must exist internally and which can contribute as a complement to success.

The next generation of investment decision-makers

This also changes the profile of successful investment teams. What is needed are investment specialists, but equally people with a clear opinion who understand the bigger picture. Capital market experience, private markets expertise and an understanding of risk and governance are key factors. Leadership experience and communication skills will be important. Sustainability and AI expertise are now also part of the toolkit, but they are only parts of a significantly broader requirement profile.

Above all, organisations need personalities who have experienced different market phases, can demonstrate sound judgment in difficult situations and can make the difference.

After all, the coming years are likely to present institutional investors with challenges different from those of the past. The decisive question will therefore not be whether there are enough CVs on the table.

The decisive question is whether the right people are at the table.

Simon Steiner is a partner at Zurich-based headhunter BiermannNeff.

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