The James Family Portfolio

ISBN 0-538-88798-2

Case Teaching Package

A case teaching package is available for this case. It includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into your course.

Length

This case is 12 pages in length and its case teaching package is 8 pages.

Abstract

B.D. James has asked his son, Biff James, to take over the management of the $7.6 million family portfolio. Biff is challenged by the prospect, but also uncertain about accepting his father's request for several reasons. Because of the size of the portfolio and the concern about mixing business with family, Biff wonders whether a professional manager should take charge. Also, B.D. has managed the funds as virtually a single portfolio, but Biff thinks it may now be time to treat each account—or groups of accounts—as separate portfolios with different investment objectives. This consideration raises new issues about the structure and diversification of the portfolio. Finally, Biff is uncomfortable about supplanting his still-vigorous and intelligent father, and about each family member's reactions to Biff's management decisions.

Fit Within a Course/Linkages to Textbooks or Journal Articles

This case was designed for undergraduate, graduate, and executive education finance students. It is best used in a course dealing with personal investments, estate planning, and human-resources issues. The case is probably best taught through in-class discussion.

Study Questions

1. Should Biff take on the job of managing the portfolio, or should he turn it over to an outside manager?
2. How should Biff go about restructuring and managing the James Family portfolio when each account has different objectives?
3. Should Biff be concerned about the overall structure of the portfolio, or should he focus on each individual account?