N&Q: Billionaire and family office advisory disputes; the Tata saga…

When the family office advisory falls out with the boss

Some insights have recently come to light into the sometimes difficult relationship between a family office adviser and the people they work for. The most notable of these involves Nathalie Dauriac-Stoebe and mobile-phone billionaire John Caudwell. Caudwell and Dauriac-Stoebe founded Signia Wealth, a UK multi-family office, in 2009, to manage their money and others. But the two have since fallen out massively and their fight is now in the courts, with accusations of illegal activities from both sides. Here’s an insight into the case for those interested.

Another dispute between a family office adviser and his boss has emerged in Australia. The case involves Simonds Family Office and Paul McMahan, with the latter claiming the family office owes him a substantial fee for advisory work – more detail is found in this account. Like the Caudwell/Dauriac-Stoebe dispute, the Australian case is currently going through the courts – that’s the only reason we know about them. Family Capital reckons these types of dispute, albeit less factious, are more common than the ones making the headlines would have us believe. It’s the old problem of “double agency costs”, which are rarely appreciated by both parties when they enter an agreement to work together.

The Tata saga…

The big family business bust up of the month looks to be happening at the huge Indian conglomerate, Tata Group. It’s been all over the financial press, and the reference here is just for a matter of record. For those interested, here’s a good analysis of the latest developments in the wranglings between the sacked chairman of Tata, Cyrus Mistry, and the man apparently behind the move, Ratan Tata. If there’s any trend that might emerge from the dispute is that the leadership of Indian family businesses, or at least the big ones like Tata, might not be so smooth in the future – or, at least, these types of disputes will be played out in the public arena more often than in the past.