FRANKFURT • Hidden on the edge of a spa town, less than half an hour’s drive from Frankfurt, is a company that lets you invest alongside one of Germany’s richest families.
Visitors to HQ Trust GmbH in Bad Homburg are quickly introduced to the most famous family member, Harald Quandt. Not in person — the German industrialist died in 1967 — but via a pair of specially commissioned portraits of him by Andy Warhol that hang in the lobby (there are also two of his wife).
The wealth betrayed by the art throughout this otherwise inconspicuous ensemble of buildings has attracted some 100 families since the Quandts in 2007 decided to offer other rich families the chance to have their assets invested under the same roof. The firm currently oversees several billion euros, according to someone with knowledge of the matter, making it one of the largest independent multi-family offices in Germany.
Although HQ Trust barely handles any assets owned by the Quandt family itself — that’s done by another unit — “there are a lot of synergies”, CEO Adalbert Freiherr von Uckermann (picture) said in an interview. “We work in the same building, next door to each other. We talk.”
For example, the Quandt family’s long-standing contacts at hedge-fund firms paved the way for some of HQ Trust’s clients to invest in the industry. Indeed, there are many similarities regarding the type of investments made by the Quandts and the other families, according to 56-year-old von Uckermann. Only the weightings differ.
“Every family has its own challenges,” he said.
Harald rose to prominence in 1954 when he and his half-brother, Herbert, inherited an industrial empire built by their father, Guenther.
During the war, Guenther family supplied the German army with firearms and anti-aircraft weapons, and he left Harald and Herbert holdings including a stake in the carmaker then known as Daimler-Benz AG. They bought part of Bayerische Motoren Werke AG a few years later.
While the half-brothers passed away decades ago, their legacy has endured. Harald heirs have kept a lower profile, despite sharing a fortune that was calculated to be worth at least US$6 billion in a 2013 Bloomberg News article.
Family offices have become more prominent in Germany as wealthy families, in search of higher returns, have tried to gain access to alternative funds. They regard themselves as a link between rich investors and asset managers, helping their clients to develop investment strategies and even taking care of tasks such as risk management and tax reporting.
“While family offices are well established in the US, their number has been steadily increasing in Germany in recent years,” said Peter Schaubach, head of the Competence Centre for Family Office at the EBS University for Business and Law in Wiesbaden.
“This is partly because of the loss of confidence in banks triggered by the financial crisis.”
In the case of HQ Trust, all the infrastructure “stemmed from requirements that the Quandt family once had”, von Uckermann said. The company currently employs about 80 people.
The Quandt heirs were early investors in private equity — now a staple in virtually all large, diversified portfolios — at a time when the strategy was little known in Germany.
HQ Trust followed suit, and now typically selects five or six private equity funds a year that it offers to its clients.
“We’ve been in touch with funds like Bain or Apollo for 20 years,” von Uckermann said. “Private equity is our sweet spot.” — Bloomberg