SFO vs FoF career

Based on the most helpful WSO content, here are some insights regarding a career in a Single Family Office (SFO) versus a Fund of Funds (FoF):

Career Transparency and Structure

• FoF:

  • Generally, FoFs have more structured career paths with clear promotion trajectories.
  • The industry is experiencing fee compression, which can impact long-term stability and growth.
  • FoFs can be a great launchpad to a stable, high-earning career without the extreme hours typical in other finance roles.

• SFO:

  • SFOs are a growing industry, but career transparency can be limited.
  • Promotion paths may not be as clear or structured as in FoFs.
  • The mentorship and financial savviness of principals can vary significantly, impacting career growth and learning opportunities.

Work-Life Balance

• FoF:

  • Generally offers a better work-life balance compared to direct PE investing.
  • Hours are typically around 50-60 per week, including travel, with some variation depending on activity.

• SFO:

  • Work-life balance can vary widely depending on the specific office and its culture.
  • Some SFOs may have demanding hours similar to PE, while others offer a more balanced lifestyle.

Compensation

• FoF:

  • Mid-level investment professional compensation for a VP is typically in the $300-400k range.
  • Compensation can vary based on firm performance and individual contributions.

• SFO:

  • Compensation details are less transparent and can vary widely based on the principal's wealth and the office's structure.
  • Offers more predictable visibility on total compensation compared to FoFs.

Industry Trends

• FoF:

  • The industry is facing challenges due to fee compression and the perception of delivering less alpha.
  • Despite these challenges, FoFs remain a viable career option for those interested in fund investing and co-investing.

• SFO:

  • SFOs are seen as a growing industry with increasing opportunities.
  • The role can be less exciting if the office focuses more on fund investments rather than direct investments.

Conclusion

• If you value a structured career path and better work-life balance, a FoF might be a better fit despite the industry's fee compression challenges.
• If you prefer a growing industry with potentially higher compensation and are comfortable with less career transparency, staying in an SFO could be advantageous.

Feel free to ask for more specific insights or details!

Sources: Direct Invest to FoF/Co-Invest?, https://www.wallstreetoasis.com/forum/asset-management/qa-current-analyst-at-20bn-hedge-fof?customgpt=1, Q&A: Head of PE at Asian SFO, Why Are Fund of Funds looked down upon?, Q&A: Head of PE at Asian SFO