Family Office Wealth Managers Make More Activist Investments - Bloomberg

Family Office Wealth Managers Make More Activist Investments - Bloomberg

The Children’s Place has been a ­mainstay of US malls for decades, with its powder-­blue logo hanging over more than 500 storefronts. Its wardrobe staples for babies, toddlers and tweens are quintessentially American, featuring myriad items emblazoned with the Stars and Stripes or messages such as “Strong Like Mama,” “I Got an A in Recess” and “All-American Boy.”

But these days, management and ownership would be better described as “not American.” Mithaq Capital, the family office of a dynasty tied to Saudi Arabia’s second-largest bank, took an activist stake in the struggling kids’ retailer in February. Mithaq, which owns 53% of the company, has installed its own leadership team and injected new funds. “Rest assured that we are going to roll up our sleeves,” Turki Saleh Al-Rajhi, a scion who serves as chairman of the Children’s Place Inc., wrote in a May shareholder letter. Neither the company nor the fund responded to requests for comment.

The pairing highlights a shift at family offices—firms that typically serve a single investor or megarich family. These funds have long wielded influence commensurate with their billions of available cash, but they’re increasingly taking on activist roles—acquiring positions to force change—at listed companies such as the Children’s Place. So as regular folks wade into equity markets, they risk investing in companies where a family office holds sway. Although the numbers are small, it’s a growing trend, says Christina Wing, an adviser to billionaire families. In the past year, family offices have taken at least a half‑dozen activist stakes globally, according to data compiled by Bloomberg. “These type of investors are kind of flying under the radar,” Wing says. “There are more of them than we think.”

In August, Tarsadia, the family office of US real estate magnate Tushar Patel, called on Covid test maker Cue Health Inc. to begin a strategic review and realign costs after a slump in its share price. Symetryx Corp., which manages money for Barry Shiff, co-founder of Israeli audio company Noveto, in September urged the board of biotechnology firm Neubase Therapeutics Inc. to pay a special dividend after it bought a 20% stake. And the fund of Mark Gottfredson, the founder of Bain & Co.’s Dallas operation, is now in a $3.2 billion duel for Vista Outdoor Inc.’s ammunition business.