Should I disclose that my Family Company is a competitor to my potential employer?

Hey everyone, 

 

I'm a long time member of this forum and have used it on a number of occasions to learn concepts, get advice and just to see other people's perspective on things. I've found it really helpful over the past few years so I thought to ask for your perspective on a topic that has been gnawing at me. I've changed some of the details to make sure it stays anonymous...

 

Backstory

My family company is a medium-sized real estate developer and investor in Europe with around $1.5B GAV. I'm 5th generation and the company is basically fully owned by one core family, so me picking real estate as an industry was 100% so I could help build this company in the future. However, at a young age, I decided that it would be best to get as much outside experience that I can apply once I felt it was the right time to return back to Europe and start working for the family office. Since then, I've completed a relevant real estate degree (in U.S.) and have worked on the East Coast for a U.S based fund that only invest in the continental U.S so never had any reason to disclose my situation as there were no conflict of interest at the fund. I recently made the decision to move to Europe (albeit a different market) in order to gain more European-specific market knowledge, before ultimately making the final move over to the family company. I recon this will be a 2-3 year position. 

 

The Problem

Since I started interviewing for pan-european funds, I've been talking to multiple companies that either have a) acquired assets that was previously owned/developed by our company or b) bidding on assets that we also had interest in some cases made bids on. I also have one offer from a company that operates in the same segment, but have not (to my knowledge) crossed paths with my family office. 

None of the companies have indicated that they know of this connection (you have to dig pretty deep to find any), but I'm getting nervous that if I accept a position like this I will face major conflict of interest issues down the line. However, I'm also afraid that if I do disclose it they will basically think she/he is going to leave in a few years so probably not the best hire. Am I right in this? What would be the best way of dealing with this? What would be the best course of action, if any? 

 

TL:DR: Should I disclose to my employer that my family company is a competitor and that I might have conflict of interest issues? 

Comments (7)

 
  • Investment Analyst in PE - Other
Feb 21, 2021 - 2:09pm

I don't think anyone would care, if anything they would see it as a positive. Real estate isn't an industry of competition, everybody runs their own numbers and get comfortable with bids and costs at their own respective levels. You're family has good assets they want to offload and now your current firm is the obvious number one choice, and I'm sure youre bringing many industry contacts which is the most valuable thing in real estate anyways.

 
Feb 21, 2021 - 3:30pm

Go speak to a lawyer. I don't think coming to a bunch of random people on this website (who you've never met and probably don't have your best interest at heart. Nor do we know your full situation) is a good idea. Clear this issue up with your family's attorney, or the GC of your family's firm. WSO is a great forum, but go speak with an attorney, not us. Also, laws, disclosure issues, etc., are different in Europe than the US. Another reason to speak with an attorney, and not random people on WSO who are mostly based in the US. 

 
  • Investment Analyst in RE - Comm
Feb 21, 2021 - 3:45pm

Let me be clear and state that I would never take a comment from a person on a forum and follow it blindly. However, it is interesting and helpful to hear people's thoughts/insights on a personal issue, because my thoughts are undoubtedly biased from being so close to it. With your perception, there is no reason to have forums, if simple discussion isn't encouraged. Maybe someone has a similar situation or been on the other side of something like this that could provide valuable insights to me. That being said, thanks for the advice ;) 

 
Feb 21, 2021 - 3:58pm

Forums are great in my opinion. And you're totally welcome to any way of using the forum. My logic has nothing to do with if forums should or shouldn't exist. This just happens to be more of a legal and ethics issue. Not sure why you want opinions from people on a forum. Your family's lawyer should be able to answer this for you in about 5 minutes, and considering you're 5th generation, maybe it's come up before with other family members. But as I have no clue since I'm not in the family and don't know you, can't really help beyond telling you to speak with your attorney. I mean...if we all said it's not a problem don't worry about it don't disclose it, but than your family's lawyer said you need to 100% disclose it, well..you see, what value did we add beyond the fact that you can find some people maybe in your situation? 

 
  • Investment Analyst in RE - Comm
Feb 21, 2021 - 4:13pm

Fair point and I appreciate the input! However, say that the issue isn't as simple as "yes, it has to be disclosed prior". Then it will be much more of a "ethics" issue as you call it, but I don't think its crystal clear what the best course of action would be. Sure, I would want to operate within reason and not act in a shady way, but still don't want something to delay my progression/exposure more than it has to at a firm. I guess that's why it's helpful to hear what people think and maybe how they would act in the situation.  

Anyways, a few years ago, I actually did speak to an attorney about this and was basically told it is not a clear blanket legal answer that could be applied and that more specific details was needed for consideration (i.e firm/size/historical overlap etc.). 

 
Feb 21, 2021 - 9:30pm

Honestly, I don't think there is any "harm" in disclosing this, frankly just weave it into your background story. Your situation is not that unusual, but I'm guessing from context nothing like your last name or something gives away the connection, many have to navigate this with their last name as a literal advertisement of the connection. Most likely, few will actually care. 

That said, if you really do have a direct financial tie to this company or could have any influence in decision making over there, you do need to be more careful and potentially make more affirmative disclosures. In theory, you could be in a true conflict of interest situation as soon you started, and may be violating various firm policies on the matter. 

Bottom line, just disclose, you will be happier long-term and not worried about having to hide it or it be discovered. Far better way to go to work everyday. 

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