James Murdoch Is Setting Up Family Office to Manage Swelling Fortune

(Bloomberg) -- James Murdoch, head of 21st Century Fox Inc. and son of one of the world’s wealthiest men, is setting up his own family office as the Murdochs are poised to cash in on the breakup of the media giant.

The office will be based in New York and have a staff of about 10 people, according to a person familiar with the decision, who asked not to be identified because the matter is private. His father, Rupert Murdoch, 87, assembled the global media empire over three decades.

Walt Disney Co. agreed to acquire most of 21st Century Fox -- where James is chief executive officer -- in a transaction valued at $72 billion. The deal has helped add $4 billion to Rupert’s fortune since it was announced in December 2017, boosting his net worth to $18 billion, according to the Bloomberg Billionaires Index.

A spokesman for James Murdoch and 21st Century Fox declined to comment.

The creation of a separate family office for James suggests that much of his father’s wealth is being passed to his heirs. James and his five siblings -- Prudence, Elisabeth, Lachlan, Grace Helen and Chloe -- are beneficiaries of the family trust that owns the Fox shares. They would receive about $2 billion each from the sale if the proceeds are divided equally, according to calculations by Bloomberg.

Splitting the windfall would represent a significant shift in the structure of the Murdoch fortune. Historically, Rupert’s heirs have had little control. The Reno, Nevada-based family trust, which holds about $15 billion of 21st Century Fox shares and $1 billion of News Corp. stock, is effectively controlled by the family patriarch, according to filings.

Family offices are created to manage an individual’s fortune, and are often started with at least $100 million. Billionaires including Oprah Winfrey, Michael Dell and Mark Zuckerberg have such entities that invest their wealth across a range of assets and also handle personal affairs such as overseeing homes and travel.

James Murdoch, 46, is already independently rich. After dropping out of Harvard University, he founded a hip-hop record label that was bought by his father, bringing him into the corporate fold. He owns about $9 million worth of shares of 21st Century Fox and $3.5 million of Tesla Inc., where he’s a board member, according to regulatory filings. He’s also received $95 million in pay over the past three years as CEO of the media conglomerate, including $50 million for the year ended June 30, 2018.

Wealthy Siblings

His siblings also have done well. Lachlan, 47, who is 21st Century Fox’s co-chairman, received a similar amount in compensation as James over the past three years. Elisabeth founded television production company Shine, which her father’s company bought for $675 million in 2011.

But a 10-figure inheritance would catapult them into an entirely different wealth strata and mark a new era for a family that’s dominated the media landscape.

James is expected to leave Fox after the Disney deal is completed and pursue interests in areas such as technology investments. Rupert Murdoch will still hold a stake in the new Disney entity and, with Lachlan, will run the Fox businesses that aren’t being sold, including Fox News.

James has had differences with his father and oldest brother, so distancing himself in terms of his future career may not comes as a surprise. While Rupert and Lachlan tend to lean politically conservative (Rupert reportedly speaks with Donald Trump frequently), James has been critical of the president. The two brothers also had differing views on how to adapt 21st Century Fox to changing digital technologies.

To contact the reporters on this story: Hema Parmar in New York at hparmar6@bloomberg.net;Tom Metcalf in London at tmetcalf7@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, ;Margaret Collins at mcollins45@bloomberg.net, Steven Crabill, Peter Eichenbaum

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