Terri Chernick never intended to join the family business. She wanted to be a doctor. "I was the black sheep of the family. I wanted to go off and do my own thing," she recalls. "In the idealistic way that young people have, I wanted to 'make a contribution to society', and because I loved the sciences I entered Brown University as a premed."
But she found her way back, and, as chief investment officer (CIO) of the Koffler Group, the family office that her grandfather established in 1979, she finds herself 'being of service' in quite a different way from what she originally envisaged.
At university she majored in neurosciences and minored in economics, took premedical courses, volunteered in hospitals and worked for a biotech company. She won places at a number of medical schools, including her preferred option, Stanford.
"But something didn't feel quite right, and I deferred admission and took a job at (consultancy firm) Bain & Co, which was fun, and I really enjoyed, not least because of the variety of the work," she recalls.
She subsequently did management jobs in a number of different Fortune 500 companies, including Amgen and Merck Sharp & Dohme. Then, still motivated by the idea of 'making a difference', she moved into the biotech sector. "I thought if I could help find a cure for a disease it would make business more 'meaningful'," she says. She co-founded a number of biotech companies, including Zycos, which was later sold to MG Pharma.
But after her grandfather died in 1996, her parents persuaded her to take over the running of the portfolio side of the family office. "They said to me: Why do you want to keep working for others when you can create such value here?"
Her grandfather created the family office after selling the hugely successful American Tourister Luggage Company he started at the height of the depression in 1932. The family office now focuses on two key areas, real estate and investment.
While it took Chernick until her late thirties to fully understand that "investing really is a service profession," she realises now that it was always business, not medicine, that was her true vocation.
"I had a natural predisposition for business and numbers from an early age, and that was nurtured by many mentors throughout my career. My dad was an investor who used to play finance games with me and my grandfather instilled in me early on the value of owning assets rather then working for an hourly wage" she says. "Even as a child I had an economist's mentality. At the age of six I organised a system of candy trading with my friends and when I was older I used to work at the business during my vacations."
But, she says, she wouldn't have got her job in the Koffler Group without earning her stripes first. "By the time I joined the business at the age of 31 I had made enough mistakes to give me both the experience and the humility to make a real difference here. I got the job on merit. The family has always hired and fired family members based on trust, performance and our willingness to put the family's interests ahead of our own. We don't inherit our jobs and our gender is immaterial."
Chernick sees her role as one of service and stewardship. She explains: "I am protecting and growing the family's assets for the future, whether for the benefit of the next generation or for the charities we support through the foundation that my grandfather set up right at the outset. I think long term, rather than just about our annual returns. Generally, I think women do focus more on protecting capital, while men focus more on making money. Ideologically, men tend to be defined – and define themselves – more in terms of their salary and job title, whereas women just want to get on and do a good job."
But she believes that at least part of her success in the CIO role at her family office stems from the fact that she combines traits associated with both men and women.
"I am very strong on analysis, and very driven, which tend to be stereotypical male qualities, but I am also adept at the equally important skill of gaining trust, which may be seen as a more female attribute. What's more, I try to never over-estimate my knowledge or skills – something that I think many male professionals often do, with damaging implications for their clients' portfolios."
An ideal CIO of a family firm is both passionate and intelligent about 'the craft' of investing, while at the same time highly loyal to the family office they serve, says Chernick. "The goals of our family office are to grow the assets to keep up with the family growth and the needs of our charities. Since families grow geometrically and assets usually grow arithmetically, that can be quite a challenge."
But it is this very challenge that makes her job so enjoyable.
"We enjoy working with small and emerging fund managers, and helping to share best practice among them. This approach combines entrepreneurship and consulting and has delivered superior returns over the past 12 years. Perhaps it is our 'female' qualities that make it so fulfilling to help start-up hedge funds: we have the patience to help the company each step of the way and we don't want the starring role."
Chernick also feels far less frustrated working in the family office than she did in big corporates. "We are much more open and less political. In some of the big companies, politics seem to take up as much time as business issues. You can write a memo and then spend half a day trying to position it right so as not to offend someone. Some people love working the politics, but I like dealing 100% with the business."
The Koffler Group employs 70 people, 65 in the 'home office' in Providence, Rhode Island, where Chernick's grandfather set up American Tourister, and five in Santa Barbara, California, where Chernick works. The Providence office focuses on real estate, the Santa Barbara office on investments.
And the fact that all the staff in Koffler Investments are female nails the myth that women are no good at numbers, points out Chernick.
"I don't actively seek out women to work here because I think a balance of backgrounds is important in order to get a range of different opinions," she says. "It's just that the women who work here were the best people for the job when I was hiring. Last year we appointed Susan Averill to the post of controller for Koffler Investments. I tend to be analytical, a bit introverted and often too busy to give people the attention they want, so I was looking for a friendly extrovert who would be accessible to employees and enjoy being a mentor and leader. That could have been a man or a woman, but Susan, whose last job was controller for JP Morgan in Italy, had both the skills sets and the personality traits I was seeking in spades. And though we usually have a male analyst – nine out of ten applications I get for the role are from men – this year I found a young woman for the role whose background left the men in the dust."
But despite the clear advantages of having women at senior levels in family offices, not all family offices encourage female involvement quite so enthusiastically, as Clara Wright, managing director of the London family office of a big multinational family, testifies.
"I believe passionately that organisations led by women are better," says Wright. "Women are better at organisation and managing and they are more empathetic."
Such qualities are, she says, especially useful in her particular family office, which looks after the whole spectrum of activities from dog walking to international tax planning.
Wright, previously a lawyer specialising in international tax, is not a family member and was headhunted to the role seven years ago. She got the office onto a more professional footing, restructuring it, hiring new staff, and moving to new premises, so that it now operates much like a boutique consulting firm – albeit with a busy concierge services division.
She herself is independently wealthy, which allows her to empathise with the family on whose behalf she works, while not becoming overawed by them. But for someone who was always intent on having a career – "though my parents thought it was frightfully odd that I wanted to train in a profession" – it concerns her that family offices such as hers are potentially breeding dependency among young family members, particularly young women.
"It is not unknown for a young woman to ask us to pay her gas bill, and we are the first place they call if they have a prang in their car," she says. But she admits the problem may be more pronounced in her family office because of its male-dominated culture.
"A man will ring me and say 'I want you to do this for my daughter,' and the fathers of even the brightest girls in the family won't entertain the notion of them being involved in the family office."
Wright is the only woman at her level of seniority in the family office, and despite her combination of attributes – "I have professional, technical and business skills, as well as being pretty tough" – and the size and scale of both the family office and the family business, in her late thirties she has hit a glass ceiling in terms of her career progression within the organisation.
As she says, that is a potential problem for both this and for other similar organisations, because people able to manage the spectrum of activities that most family offices engage in are rare.
"I go from the sublime to the ridiculous," she says. "In the morning I might be chairing an important meeting on a jurisdiction issue, and in the afternoon I could be taking a call from a woman asking me to sack her nanny for serving up fish fingers to the children three days on the trot. The variety and interest of the work has been enough to keep me here so far, but I'm never going to become a shareholder in the family business and, if I stay, I'll never be a partner in a legal firm."
Wright is currently building in succession to the family office, and thinks one solution to the problem of finding someone who can tick all the right boxes might be to split the role in two.
Women, whether family members or not, clearly bring great strengths to senior roles in family offices. Family offices that recognise this will reap benefits – but they need to ensure that if they find a woman with the right credentials they also work hard to keep her.