N&Q: Huge liquidity event for billionaire family; family office performance and deals; family businesses in the 21st century - new book

Texas Bass family sells oil and gas business to Exxon

One of America’s wealthiest families has sold their Permian basin oil and gas interests to Exxon for around $6 billion, according to Forbes. The Bass family’s fortune was built up by Texan oilman Sid Richardson. After his death, some of his fortune was passed down to his four nephews, the Bass brothers - Sid, Edward, Robert and Lee. Robert, the richest, owns a family office/investment group called Oak Hill Capital Partners.

 

Mixed returns for high-profile family offices in 2016

The family offices of George Soros and Steve Cohen had a torrid time in 2016 as they were hit with wrong bets on the stock market and the Trump Bump. In contrast, two other former hedge funds, but now family offices, recorded strong returns last year.

The Wall Street Journal reported that Soros Fund Management lost nearly $1 billion as a result of the so-called Trump bump when US stocks rallied after Donald Trump’s presidential election. Nevertheless, the overall performance of the group was up 5% in 2016, according to the report. Soros Fund Management use to be classified as a hedge fund, but since regulatory changes, the group has dropped all outside money and today only manages the money of the Hungarian-born billionaire and his immediate family.

According to a Bloomberg report Cohen’s family office, Point72 Asset Management, underperformed hugely in 2016, returning just 1%. That compares to a typically average annual return of 30% of Cohen’s hedge fund group SAC Capital Advisors that proceeded Point72, said the Bloomberg report. Point72 was hit by high equity correlations as money continued to pile into index funds and wrong bets on the strength of US stocks.  

In contrast, BlueCrest Capital Management, another hedge fund that has become a family office, saw a 50% gain last year, according to the Bloomberg report. Also notching up a good 2016 was the Duquesne Family Office, the former hedge fund of Stanley Duquesne, who use to work with Soros. His family office ended 2016 higher by more than 10%, according to the Wall Street Journal article.

 

Family office deals

Eric Schmidt’s family office Hillspire has backed a startup called HouseCanary, which provides software and analytics for the real estate industry, according to CrunchBase. Schmidt, through his family office and personally, has invested in more than 20 startups since 1999.

Kohli Ventures, the London-based family office of Indian entrepreneur Tej Kohli, has launched a $25 million investment fund to target tech businesses in the UK. The fund, says a report, “will invest in innovative and disruptive technologies in the UK and across the globe which have the potential to benefit the world socially and environmentally”.

 

New book: Family Businesses in the 21st Century

Nadine Kammerlander, the chair of family business and academic director of the Institute of Family Business at WHU - Otto Beisheim School of Management, has edited a new book called Family Business in the 21st Century. The book is built on a collection of recent WHU theses and addresses several of the most important challenges that family businesses face in the 21st century.