Human capital. The role of human capital as a key factor to explain firms' performance has been highlighted by researchers working on developing a resource-based theory of competitive advantage. The theory argues that the heterogeneous distribution of valuable resources among firms – such as human capital – explains performance differences. Researchers generally concur that the knowledge embedded in human capital is a firm's most universally valuable resource, and it is hard to imitate. High returns and risk diversifications have traditionally been the main focus of the PE, VC, and investment industry at large. A vast number of research papers have been published on the growing importance of human capital in the economic world, but very few are specific to the investment industry. While it is undeniable that an investment fund's performance is driven by many external factors – such as favorable markets, and a stable or growing economic environment – in an increasingly globalized economy the underlying internal driver of success is the quality of an organization's human capital.  

Critical skills. The staff of the best investment companies, at all levels, share common characteristics: they have (i) knowledge and skills about generating value, and an ability to read and interpret trends within the target markets, that is, financial awareness; (ii) the ability to quickly implement the right investment approach, that is, commercial awareness; and (iii) access to extensive networks of contacts and the ability to interact with a wide array of people and interests, that is, people skills.  

For some EMDEs, the establishment and operation of SIFs have been greatly helped by the increasing availability of highly qualified investment professionals both domestically and among their diaspora. For example, Nigeria and Senegal have been able to staff their respective SIFs with diaspora members that have extensive international experience in the financial sector. 

Cross-fertilization. Since SIFs are generally established to crowd in private investors, co-financing with the private sector is likely to enhance market validation and at the same time provide additional expertise to enhance the quality of investment decisions and fast-track their staff's learning curve. This model works best when there is a general alignment of interest among investment partners. The combination of private and public sources of funding in a hybrid SIF's capital structure helps to keep the limited and general partners' interest aligned, and may also be well suited to addressing issues related to limited partners' inadequate human capital. However, even as a limited partner, an SIF needs to acquire and retain sufficient capacity for project selection and assessment, and for the oversight of the general partner's activities.

Staff remuneration policy. An SIF's ability to offer staff benefits packages beyond those available through standard public sector salary regimes is also critical to attract and retain highly skilled investment managers. This may require special legislation. For example, FONSIS benefits from legislation that sets it apart from other SOEs, and allows it to operate as an independent PE firm on behalf of the Senegalese government. The fund offers salaries and benefits that are relatively competitive to attract and retain highly specialized staff from the private financial sector. During recruitment, applicants' experience and education are screened by a professional recruitment firm, and candidates take financial aptitude tests as part of the selection process. In low- or middle-income countries, where high salaries for SIF professionals may be politically contentious, donor organizations could help remunerate specialist SIF staff via technical assistance facilities, as deemed adequate for the successful operation of the SIFs.