The art of discretion: Gabriele Quandt, one of four siblings whose money is managed by Harald Quandt Holding

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The BBC television programme Who Do You Think You Are?, now in its 11th year, takes notable people, who have included author JK Rowling, artist Tracey Emin and London mayor Boris Johnson, and traces their ancestry to uncover past secrets. The more scandalous the better: ratings rise for every skeleton revealed.

Harald Quandt, the German industrialist, would have made an ideal subject. Although he died in an air crash in 1967, his name lives on via Harald Quandt Holding, a family investment company and trust based in the spa town of Bad Homburg, near Frankfurt, that manages the money he inherited and accumulated during his 45 years.

Had he appeared on the BBC show, the presenter, aware of the fortune’s murky origins, might have asked: “Where exactly did the money come from?”

In 1954, Quandt and his half-brother Herbert inherited an industrial empire built by their father, Günther, a former member of the Nazi party. The Quandt family factories produced firearms and anti-aircraft weaponry for the Third Reich’s war effort.

From 1940 to 1945, the factories were staffed by more than 50,000 forced labourers, prisoners of war and concentration camp workers, according to a family-commissioned study that was produced in response to a highly critical German television documentary in 2007 about the family’s ties to the Nazi regime.

The strength of those ties is perhaps best illustrated by the fact that Harald’s mother, Magda Behrend Rietschel, married Nazi propaganda minister Joseph Goebbels after her split from Harald’s father in 1929. Adolf Hitler was the best man at the wedding.

Although the half-brothers passed away decades ago — Herbert died in 1982 — their legacy has lived on. Herbert’s widow, Johanna Quandt, who died in August this year, and their children, Susanne Klatten and Stefan Quandt, have remained in the public spotlight thanks to their 47 per cent shareholding in carmaker BMW — a stake bought by the half-brothers after their father’s death. When Johanna Quandt passed away she was the second-richest woman in Germany and the ninth-richest in the world, according to Forbes magazine.

Harald Quandt

Meanwhile, Harald Quandt’s daughters — Katarina Geller-Herr, Gabriele Quandt, Anette-Angelika May-Thies and Colleen-Bettina Rosenblat-Mo — have kept a lower profile, and it is their money that is managed by Harald Quandt Holding.

Philipp Geller, a partner at HQ Trust, the multifamily office of the Harald Quandt family, will not disclose the wealth of the daughters, other than to say it is “sizeable”. According to the family’s sanctioned biography, Die Quandts (The Quandts), the four sisters inherited some 1.5bn Deutschmarks (then about $750m) after the death of their mother, Inge, in 1978. A Bloomberg report suggests the siblings have harvested average annual returns of roughly 7 per cent since the family office was founded in 1981. Together, the four sisters — and the two children of a deceased sibling — share a fortune of at least $6bn, according to the Bloomberg Billionaires Index.

Herbert Quandt

Harald Quandt Holding and its related investment subsidiaries have some $18bn of assets under management, and HQ Trust is now using its experience to offer asset management services to outsiders.

Geller, who joined HQ Trust from private bank UBS in 2011, says attracting third-party assets has not been difficult. “But you’d have to talk to our relationship managers to get a definitive answer on that,” he says.

The evidence would suggest it has not been a hard sell. HQ Trust runs money for 30 other families and now manages more assets for third parties than it does for the Quandt family. According to Geller, HQ Trust is one of the largest independent multifamily offices in Germany.

“Twenty of us moved from UBS in 2011, which gives you an indication of the size,” he says. “A client makes a decision very early on whether they want to be with a family office or a private bank — and that decision has to do with privacy.”

Stefan Quandt

Despite the arrival of so many staff, none of the money managed by HQ Trust, which is also based in Bad Homburg, is run in-house. It employs external investment houses and, says Geller, raising assets from other families has been crucial to keeping those transaction costs down.

A failure to do so has long been a criticism levied at family offices.

“We only use external managers,” says Geller. “The problem is that if you do it yourself and then decide you want to invest in something new, you would need to hire people internally to do that for you. That’s not easy, and if you change your mind, you would then have to get rid of them, which is expensive.”

He adds: “By building scale, however, you would be surprised just how low you can get the fees of external managers.”

Dominic Samuelson, London-based chief executive of Campden Wealth, an independent provider of research for family offices, believes HQ Trust manages sufficient assets for it to be a viable proposition for the Harald Quandt family and other outside clients.

“Traditionally, for multifamily offices to be sustainable over the medium to long term, they must manage cumulative assets of more than $3.5bn,” he says.

A large proportion of the family’s assets are invested in alternatives. Harald Quandt’s daughters — who are not involved in the day-to-day running of the office but have a “strategic” input — committed to alternative assets in the late 1980s, long before many other investment groups were considering such strategies.

“A third of assets are in alternatives,” says Geller. “The family have done very well out of [them].”

Down a separate road

Johanna Quandt

The death in August at age 89 of Johanna Quandt, the billionaire BMW heiress, has had no impact on the money managed by Harald Quandt Holding.

The BMW matriarch was Germany’s second-wealthiest woman, with a fortune estimated by Forbes at $11.6bn, thanks largely to a 17 per cent stake in one of the world’s largest premium carmakers.

Her stake, however, was left to her by Harald Quandt’s half-brother, Herbert, who took over the interests in the family’s car businesses when his father died. Harald, meanwhile, oversaw the interests of his late father’s industrial companies.

Though managed by a single-family office just across the road from Harald Quandt Holding in Bad Homburg, Herbert’s half of the Quandt fortune is completely separate. “The wealth is split between the two families, so the passing of Johanna Quandt had no impact on us,” says Philipp Geller of HQ Trust.

Johanna’s two children, Stefan Quandt, 49, and Susanne Klatten, 53, who are members of BMW’s supervisory board, will inherit their mother’s stake and retain the family’s combined 47 per cent holding in BMW, which also owns the Mini and Rolls-Royce marques.

Johanna Quandt married Herbert in 1960, becoming his third wife. At the time, BMW was on the edge of collapse and had flirted with a takeover by Daimler-Benz. Herbert helped preserve its independence and steered it back to profitability.

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