Bernstein Global Wealth Management: From One Generation to the Next

Abstract

Family business as a topic has grown to constitute a major segment of the U.S. and global economies. In many regions of the world, family companies dominate the economy. Running a family business can be especially challenging when considering the complexity of working with and managing family members. This field-based case offers a disguised situation between first- and third-generation family members around an investment opportunity. A supplemental spreadsheet allows students an opportunity to do some simple forecast calculations and figure out the demand the opportunity would put on the family portfolio.This case was successfully used in a second-year elective course on global family enterprises in a class focusing on asset management. Excerpt UVA-F-1713 Jun. 16, 2014 BERNSTEIN GLOBAL WEALTH MANAGEMENT: FROM ONE GENERATION TO THE NEXT As the time approached midnight on a Thursday in late February 2014, the workday was not yet over for Cam Jones, an adviser at Bernstein Global Wealth Management. A new client, Magnus Karlsson, had recently hired the firm to develop a new long-term investment strategy for his family office. Although Karlsson had built a successful retail chain in Europe, he was finding the transition from a single-revenue-source business to a more diversified family office much more difficult than expected. After two meetings with the client, Jones and his colleague Stuart Smith, managing director at Bernstein, had begun to understand their client's objectives, needs, and attitude toward risk. Two days earlier, Jones had received a potentially game-changing phone call: Karlsson had found a new investment opportunity. If his family invested in this business, it would tie up a lot of capital and require radical changes to the family's wealth management plan. A day later, Karlsson called to let Jones know he would be in New York the next afternoon; he wanted to have a meeting at the Bernstein office to hear his advisers' views on this investment opportunity. Although it was common for Bernstein clients to schedule meetings on short notice, this one would be especially challenging because it could involve a significant transformation of the client's liquid-asset portfolio composition. There was additional pressure because Karlsson had been referred to Bernstein by his lawyer, who mentioned that, if things went well, he could set up introductions with more of his clients. . . .