The mysterious family office behind Musk

Image source @ Visual China

Text | Phoenix Network Technology, author | Zhenyu

Wharton's Amrit said the idea of loyalty is very important, especially in family offices.

On April 26, Beijing time, Elon Musk officially announced the acquisition of Twitter for $44 billion on Monday. Behind this, a mysterious small family office is emerging, helping the world's richest man manage his wealth and orchestrate the largest one-man acquisition ever made by one person. A family office is a private institution that manages wealth for wealthy families.

Musk, a dual CEO of Tesla and SpaceX, revealed in a regulatory filing filed last week that Twitter should contact his family office to negotiate his acquisition proposal.

01 Mysterious family office

However, little is known about the Austin, Texas-based family office that manages Musk's assets. The office is called Excession, and the person who helped create it was Jared Birchall.

Regulatory and legal documents show that Bercal was a banker at Morgan Stanley. For years, he has advised Musk on his interactions with Wall Street. Court documents show that he also hired an investigator to investigate a critic who Musk called "pedophilia" in 2018.

Born in 1974, Burchar was hired by Musk from Morgan Stanley in 2016 to work in his family office. Burchar also serves as CEO of Musk's brain-computer interface company Neuralink, a director of the tunneling company Boring Company, and a board member of Musk's Private Philanthropy Foundation.

The Texas Public Accounts Audit Office's business registration records show that Bercal was listed as an Excel manager in 2021.

02 Unusual manager

Wharton management professor Raphael Amit said it's not common for family office managers to take multiple roles, which also speaks to Musk's trust in him.

"Once you appoint someone to run a family office, it means you trust him. Musk did this to give him (Berchar) maximum control. Amit said.

Morgan Stanley led Musk's financing plan to buy Twitter and advised him on a successful deal, which brought the two sides to the peak of their multi-year partnership. This relationship was established and consolidated by Bercal.

In August 2018, Musk said on Twitter that Goldman Sachs and Silver Lake Capital would be responsible for managing his ultimate failed efforts to take Tesla private. A day later, Bercal sent a message to Musk encouraging him to hire Morgan Stanley.

"So far, they are the best resource we can get on a personal side. They offer you the highest of all the lines of credit ($350 million). Every time we pressured them to get more loans or lower interest rates, they were satisfied. Documents disclosed by Musk during the privatization tweet trial show. Musk responded: "It seems fair. ”

"Excession" is also the first of Ian Scott's novels. The name of a science fiction novel about artificial intelligence written by Iain M. Banks. Musk was seen holding the novel at the 2015 Sun Valley Summit in Idaho.

03 Only two people?

Musk has said in a defamation trial in federal court in Los Angeles that in 2019, Excession was "basically just two people." The identity of the second person is unknown.

Industry insiders say it's not uncommon for a small group of people to manage a family office. But billionaire Jeff Bezos reportedly has more than 100 people in his family office.

Currently, there is no regulatory requirement for family offices to publicly disclose their assets or key personnel. Excession's assets, asset value, and number of employees are also unknown.

The profile of LinkedIn, a career social networking site, shows that Bercal graduated from Brigham Young University. He began his career at Goldman Sachs in New York in 1999 as a financial analyst. He then moved to Los Angeles to join Merrill Lynch and spent about 10 years as a wealth manager.

According to records by the Financial Industry Regulatory Authority (FINRA), Merrill Lynch fired Burchar in 2010 for "conduct that caused management to lose confidence," including "sending letters to clients without management's approval." No further details of Bercard's dismissal could be determined, and neither the Financial Services Regulatory Authority nor Merrill Lynch responded to requests for comment.

Less than a month later, Bercal began working as a wealth manager at Morgan Stanley. A Morgan Stanley spokesman said Burchar was generally well received while working at the bank and was a friendly departure.

Bercard has played a role that has surpassed that of the financial industry. In 2018, he hired a private detective to investigate a British diver who had criticized Musk's idea of using a SpaceX mini submarine to rescue a boy soccer team trapped in a cave in Thailand, court documents show.

When Musk responded to criticism on Twitter calling the diver "pedophile," the diver sued him for defamation. At the subsequent trial, Bercal (pseudonym James Brickhouse) hired a private investigator to investigate the diver. In court testimony, Burchar said he had an "instinct to protect Musk." Musk eventually won the case.

Wharton's Amrit said the idea of loyalty is very important, especially in family offices. "Because you're exposed to the most intimate, private issues in the family."