Funding Obscured: The Family Office Behind Musk’s $44 Billion Twitter Takeover

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When Elon Musk announced his surprise deal for Twitter Inc earlier this month, he said the social media company should contact his family office with any questions.

Yet very little is known about the Austin, Texas-based family office that manages the assets of Musk, the world’s richest person and CEO of electric car maker Tesla Inc and aerospace company SpaceX.

The office is called Excession and the man who helped build it is Jared Birchall, a former Morgan Stanley banker who advised Musk on his interactions with Wall Street for several years, according to regulatory filings and legal documents.

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Birchall is also chief executive of Musk’s brain chip company Neuralink, director of Musk’s tunneling company The Boring Company, and a board member of the billionaire’s private philanthropic foundation.

Birchall’s multiple roles are rare for a family office manager and illustrate Musk’s confidence in himself, said Raphael Amit, professor of management at the Wharton School.

“Once you have appointed someone to lead the family office, it means you trust them. And Elon wants to set it up in a way that allows him (Birchall) maximum control.

Birchall and Musk did not respond to requests for comment.

Born in 1974, Birchall was hired by Morgan Stanley’s Musk in 2016 to work for his family office. Business registration records with the Texas Comptroller of the Public Accounts list Birchall as a director of Excession as recently as 2021.

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MORGAN STANLEY AS “BEST RESOURCE”

On Monday, Musk struck a deal to buy Twitter for $44 billion in a watershed moment for one of the world’s most influential public forums. Musk’s funding includes a personal pledge of $21 billion in cash and $12.5 billion in margin loans against his Tesla stock.

Morgan Stanley led the financial package for Musk’s bid and advised Musk on the success of the deal, culminating several years of a relationship that Birchall nurtured.

A day after Musk tweeted in August 2018 that Goldman Sachs and Silver Lake would handle his ultimately failed effort to take Tesla private, Birchall sent a message to Musk encouraging a Morgan Stanley role.

“They have been by far our greatest resource on a personal level. They provide you with the largest ($350 million) of all lines and every time we pressed them for more borrowing power or a lower rate they were successful,” he wrote, according to reports. documents leaked in a trial over Musk’s tweets that he was considering taking Tesla private.

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Musk replied, “That seems fair.”

A graduate of Brigham Young University, Birchall began his career at Goldman Sachs Group Inc in New York in 1999 as a financial analyst, according to his LinkedIn profile. He then joined Merrill Lynch in Los Angeles for ten years as a wealth manager.

Merrill Lynch fired Birchall in 2010 for “conduct causing loss of trust in management” which included “sending correspondence to a client without management approval”, according to Financial Industry Regulatory Authority (FINRA) records. ). Reuters could not obtain further details about Birchall’s dismissal, and FINRA and Merrill Lynch did not respond to requests for comment.

Less than a month later, Birchall started working at Morgan Stanley as a wealth manager.

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A Morgan Stanley spokesperson said Birchall was well regarded while working at the bank and left on good terms.

‘PROTECT THE MUSK’

“Excession” is the title of a sci-fi novel by Iain M. Banks about artificial intelligence that Musk was seen wearing at a conference in Sun Valley, Idaho, in 2015.

There is no regulatory requirement for family offices to publicly disclose their assets or key personnel, and Excession’s holdings and the value of its assets and number of employees could not be known.

Birchall’s role extended beyond finance.

In 2018, he hired a private investigator to investigate a British diver who criticized Musk’s idea of ​​using SpaceX’s mini-submarine to rescue a boys’ football team trapped in a cave in Thailand, according to court documents.

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When Musk called the diver a “pedo guy” in a response on Twitter, the diver sued him for defamation. At the ensuing trial, it emerged that Birchall, named James Brickhouse, had hired a private detective to investigate the diver. Birchall said in court testimony that he had “the instinct to protect Musk.”

Musk won the case.

“The idea of ​​loyalty, especially in the family office, is hugely important,” said Amit of the Wharton School. “Because you are exposed to the most intimate and private issues of families.”

Excession consisted of “essentially two people” in 2019, Musk said during the defamation trial in Los Angeles federal court at the time. The second person is unknown.

It’s not unusual for a small group of people to run a family office, industry sources said, although by contrast, billionaire Jeff Bezos’ family office is said to have more than 100 people.

Twitter shares fell 3.5% to $49.90 on Tuesday afternoon.

(Reporting by Hyunjoo Jin in San Francisco and Elizabeth Dilts in New York, with additional reporting by Krystal Hu in New York and Michelle Price in Washington Editing by Peter Henderson, Greg Roumeliotis and Matthew Lewis)

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