Mike Kosnitzky Considers the Forces Driving the Professionalization of Modern Family Offices

Private Client & Family Office partner Mike Kosnitzky told Business Insider that “this has been going on for years. Everyone’s making a big deal now, but we’ve been parachuted into these situations for a long time.”

Increasingly, the ultra-rich are transforming traditionally low-key family offices into sophisticated, corporate-style investment engines staffed by elite financiers from major Wall Street and private-equity firms.

“They thought what a family office needs is someone who knows about wealth. It’s not,” he said. “What they need are people who understand investments, who can manage platform and club investing, and manage the personnel.”

As he put it, “They’re snapping up investment bankers and fund managers. They want to be compensated like fund managers.”

Kosnitzky attributes the hiring of non-family executives to a broader shift in how wealthy families think about risk—driven by waves of liquidity events, a younger generation of billionaires and the rise of “club investing,” where multiple families team up to invest in startups and private ventures.

“They don't want to pay the carried interest to some third party,” he said. “They don’t want to deal with conflicts of interest. They say, ‘I can do this myself.’”

Still, he emphasizes that running a family office extends beyond financial acumen.

“You’re not running a business in the traditional sense,” Kosnitzky said. “You’re running a family. The right person understands that money isn’t the only metric—legacy, art, philanthropy and continuity matter just as much.”

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