N&Q: Prominent family business buyout likely; hedge funds and family offices; principal/agency conflict

Family want to buy out their business from public ownership

The family that own Nordstrom, a fashion speciality retailer based in the US are looking at taking the business private. According to a statement from the company, family members including the company’s co-presidents Blake Nordstrom, Peter Nordstrom, and Erik Nordstrom, president of Stores James Nordstrom, chairman emeritus Bruce Nordstrom, and Anne Gittinger – have formed a group to explore the possibility of pursuing a “going private transaction” involving the acquisition by the group of 100% of the outstanding shares of common stock of the company. Founded in 1901 as a shoe store in Seattle, today Nordstrom operates 354 stores in 40 US states, but the business has struggled in recent years with competition from online shopping.

Could Paulson’s hedge fund about to become a family office?

Speculation is mounting that one of the most famous of the hedge fund titans, John Paulson, might be forced to turn his hedge fund into a family office. An article in Dealbreaker suggested that the loss of outside investors in the hedge fund group Paulson & Co might force one of the most prominent hedge fund individuals of the last 20 years to be “enforced” into “family-officeness”.  Paulson is resisting the move, says the article, and is seeking to grow assets under management from outside investors.  But if Paulson can’t and is forced to turn his hedge fund into a family office, the move will be hugely indicative of the demise of the hedge fund sector and the rise of the private investment office model since the financial crisis of 2008.

The principal/agency conflict in all its glory

A conflict between a family office principal and a senior manager has hit the headlines in the US. According to Institutional Investor, hedge fund guru John Burbank, the founder of Passport Capital, is in a legal battle with Lindsay Lee, who was an advisor to Burbank’s family office, JHB Ventures.