The Richest Families in 2019: The BMW Family Winter

 The Richest Families in 2019: The BMW Family Winter

According to Bloomberg on August 28, the wealth of the worlds 25 richest families has increased by 24% and about $250 billion in the past year or so, benefiting from ultra-low interest rates, tax cuts, deregulation and innovation. Today, they hold a total of $1.4 trillion in assets.

However, due to the downturn in the global car market, the Quanter family, which runs BMW, fell eight places because of its high cost investment in the new energy automotive track, which has made the profits of the company skeletal; the Duncan family, which comes from the French industrial giant Dassault family and the American oil and gas giant, dropped out of the wealth family list.

But in any case, the Matthew effect will continue. As Scott Burns, a financial columnist, points out in an analysis, the wealth family is taking a bigger and bigger share of the whole economic cake. No matter how you divide it, the rich are getting richer and richer all the time.

Earning $70,000 per minute

70,000 US dollars per minute, 4 million US dollars per hour, 100 million US dollars per day.

This is the report card of wealth and income handed over by the Walton family. Since reaching the top of the list last year, their wealth has increased by $39 billion to $191 billion. In the past year, the Walton family has earned a dividend of $3 billion from its 50% stake in Wal-Mart.

Wal-Marts latest earnings report showed that Wal-Marts revenue in the second quarter was 130.377 billion US dollars, up 1.83% year-on-year, and its net profit reached 3.61 billion US dollars, exceeding market expectations. Wal-Marts U.S. same-store sales rose against the backdrop of the winter in the U.S. retail industry, with second-quarter sales (excluding energy sales) growing by 4.5%, the fastest growth rate in more than a decade.

Although the retail giant remains the wealth base of the Walton family, as the third generation of members spreads, huge amounts of capital are rewarded by investing in different sectors.

According to Bloomberg, Walton Family Holdings Trust has sold $10 billion worth of Wal-Mart stock over the past three years, and besides the companys stock, the Walton Family has about $40 billion in assets.

In February 2016, the Walton Family Foundation decided to cut the number of board members to five, three of whom are younger. Ben Walton, 44, founded Zoma Capital, an investment company focused on energy, water and community development; Steuart Walton, 38, founded RZCInvestments, a private equity firm, and bought Rapha, a bicycle brand, for $260 million in 2017. He is also the founder of Composite Aircraft Manufacturer Game Composites.

By contrast, it is not surprising that the Saudi Royal family, born with a golden spoon, will become the newest on the wealth list.

Estimates of its assets come from the cumulative expenditure incurred by the executive Royal Diwan over the past 50 years for members of the Royal family, but Bloomberg also points out that the total wealth controlled by about 15,000 members of the royal family may be much higher than the $100 billion valuation of its assets.

As the worlds largest oil producer, last year Saudi Arabias Americans overwhelmed American giants such as Apple and ExxonMobil to become the worlds most profitable company. This momentum continued until 2019, with net profits of $46.9 billion in the first half of this year.

For more than two years, the Saudi royal family has been hoping to invest 5% of Saudi Arabias shares in the stock market through an IPO to raise $100 billion; in April, Saudi Arabia issued bonds for the first time in the international market, attracting more than $100 billion in subscriptions; and in June, after the postponement of the IPO in 2018, Saudi Crown Prince Mohan. Mead Ben Salman said the Saudi government is still committed to promoting the IPO of Saudi Arabia and Amy, and said it expects to complete it by 2020 or early 2021.

The Dilemma of Wealth Inheritance

The days of the rich are far more sad than they think, Stefan Quandt and Susanne Klatten said in a media interview in June. Many people think well always be on a yacht in the Mediterranean. The role of guardian of wealth also has a less beautiful personal side.

Its not a gesture. At the age of 16, German police cracked a case of kidnapping her and her mother, making her the focus of the media; when she joined BMW as an intern, she had to use an alias; and in 2007, Kraton was involved in a racketeering case.

As the fourth generation heir of the Kurt family, Kraton is the second richest person in Germany, with a net asset of 18.6 billion US dollars and a net asset of 15.5 billion US dollars. The two brothers and sisters currently hold 46.7% of BMW shares.

In the current cold winter of the car market, BMW Groups net profit in the first half of this year was only 2.068 billion euros, down 52.5% year-on-year. BMW explained that the expenditure on electric vehicle research and development had reduced the profit margin, and the companys research and development expenses in the second quarter totaled 1.4 billion euros, up by 5.9% year-on-year.

This also made the Quanter family rank 16th on the list. At present, how to make BMW break through in the field of new energy automobiles is still the pressure faced by Kratons sister and brother.

Many family-run enterprises tend to decline from prosperity due to the lack of diversification of their portfolios and the handover of family management. Rebecca Gooch, research director at Campden Wealth, an investment company, points out that family businesses will face a formidable challenge in securing long-term wealth inheritance.

In this regard, the Kurt family also retained a backbone, in addition to the industrial empire, another branch of the family devoted to the financial industry.

Herbert Quanters brother, Harald Quanter, chose a different path. In 1981, they sold about 15% of Daimler-Mercedes-Benzs equity held by their family and established the earliest single family office (SFO) in Germany, HQ Holding, to manage family wealth in a unified way, from investment, insurance, to art collections, stables management, etc., tailored to their own gold. Financing asset management services, the companys investment advisory business is now managing more than 17 billion euros of assets.

Perhaps in Kratons view, the inheritance of family wealth is like a high sword of Damocles, but in the context of global economic turmoil, the plot of this era has just begun.

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Source: Times Weekly Responsible Editor: Yang Bin_NF4368