Mark Zuckerberg's Advisor Becomes A Star, Even Though Facebook Founder Faces $2 Billion Tax Liability

Monday, February 06, 2012 08:45
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Mark Zuckerberg's Advisor Becomes A Star, Even Though Facebook Founder Faces $2 Billion Tax Liability

Tags: investment advisors

The looming Facebook IPO has people taking about Mark Zuckerberg's financial advisor, Divesh Makan, who stands to generate a lot of AUM once his client's company goes public.

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Profiles of Makan focus on his Silicon Valley connections. He came out of Goldman Sachs and went to Morgan Stanley in 2008, only to start his own firm -- Iconiq Capital -- a few months ago.

 

Makan has attributed the decision to go independent to his reluctance to push proprietary investment products.

 

However, he doesn't seem to be hurting for cash. While he probably had to repay about half of his $20 million signing bonus when he left Morgan, with clients like Zuckerberg and other Facebook executives on his roster, he is probably not hurting for production.

 

The IPO will translate into $28 billion in liquid wealth for Zuckerberg and, reportedly, a $2 billion tax bill. Effectively all of his personal income from the offering will go to pay that bill.

 

It remains to be seen how Makan will invest the rest of Zuckerberg's billions once the shares are tradeable on the open market.

 

In the near term, Zuckerberg will want to hold onto his control of the company, which means holding onto most of the shares -- he still owns 28% of the $120 billion company outright.

 

This means Makan's real job is building a diversified portfolio around that massive concentrated investment. 

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