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This summer, as the Covid-19 pandemic brought Europe’s largest economy almost to a standstill, Germany’s normally reclusive ultra-rich found themselves in the spotlight.
Dietmar Hopp, the octogenarian co-founder of software giant SAP (pictured), became entangled in a feud with the Trump White House over the supply of a potential coronavirus vaccine developed by CureVac, a biotech company he largely owns.
Billionaire Heinz Hermann Thiele, a 79-year-old former tank commander turned industrialist, shook markets by building a stake in the ailing national carrier Lufthansa, and tacitly threatening to block its rescue deal by the German government.
Meanwhile, Clemens Tönnies, the so-called “beef baron” and owner of Europe’s largest meat manufacturer, made headlines as Covid-19 infected 1,300 of his staff. The virus ran riot through his slaughterhouses in Gütersloh, prompting nationwide debates about working conditions in the industry.
Suddenly, the chasm between Germany’s rich, who often go to great lengths to disguise their prosperity, and the country’s middle and poorer classes had come into focus, just as the pandemic raised questions about inequality.
As if on cue, an influential study published in July showed rich Germans’ accumulated wealth was even higher than generally estimated, prompting widespread calls for stiffer taxes on the wealthy to help pay for the Covid crisis. “[Rich] people are feeling insecure and shaken by society, and especially by the media,” says Christian Freiherr von Bechtolsheim, the founder of Focam, a Frankfurt-based wealth manager.
Few rich Germans are keen to follow Thiele, Tönnies and Hopp into the limelight. In contrast to some American, British and French billionaires, most prefer discretion — often enshrined in family privacy codes. Many think a low profile has served them well for decades, as they profited from West Germany’s recovery from the second world war, reunification with East Germany and the recent export boom.
But the world of Germany’s rich is changing. Many of those running family-owned companies are preparing to hand over to a new guard, as the men — they are largely male — who founded fortunes after 1945 retire or pass away. The so-called Erbengeneration, or “generation of heirs”, are a more diverse group. Less encumbered by the darkness of the war and its aftermath, they are freer to choose their own paths.
Often educated abroad, a growing number are acutely aware that they have come into fortunes they did not earn. A few, like the young rich elsewhere, make colourful media headlines. At the other extreme, some want to put money into progressive causes, even at the expense of their own lifestyles. In the middle, many still value discretion, and share their parents’ dislike of the publicity generated by Hopp, Thiele and Tönnies, all first-generation entrepreneurs.
But, with the digital age making it harder to avoid the limelight, at least some of Germany’s younger millionaires and billionaires are becoming more outspoken and engaging in political debate. Among those publicly urging higher taxes to help pay for the Covid crisis are Christina Hansen, granddaughter of a mechanical engineering magnate, and Antonis Schwarz, heir of a pharma fortune. He says: “The people that actually have the money are not doing enough [for society].”
Germany has a high tally of wealthy people — with 107 billionaires, the third largest total after the US and China, and well ahead of the UK (45) or France (39), according to Forbes, the business publisher. Unlike Britain and France, where wealth is concentrated in the capitals, Germany’s rich are spread across prosperous cities, towns and even rural family bases. Their money is less often held in land or financial instruments than in the UK or France, and more often concentrated in family-run businesses, frequently in manufacturing.
As these Mittelstand companies are mostly privately held — without publicly traded stock — their value is rarely revealed. But a study by Berlin-based economics institute DIW has shown that such families are even richer than previously estimated, with the richest 1 per cent of Germans having a similar share of national wealth as their US counterparts — about 35 per cent, not 22 per cent as was thought previously.
The commitment to family businesses is deeply rooted in a country where industry accounts for 24 per cent of gross domestic product, compared with 10-12 per cent for the US, France and the UK. Reinforcing this trait is an inheritance code which grants big exemptions to heirs who do not sell up but stick with the family business and maintain jobs.
It is against this background that Hopp et al have raised their heads above the parapet. Hopp, in particular, has attracted the wrath of Germany’s diehard football fans by buying his local club TSG Hoffenheim and showering the team with enough cash to propel it into the Bundesliga.
He has not shied away from hitting back at critics. “If I had a clue what these idiots want from me, it would all be easier for me to understand,” he told a sports website in March.
While Hopp is held in high regard by Germany’s elites — for his entrepreneurial eye, as well as his charities and standing up to Trump — few of the country’s rich like his brashness. “If there is a sense that someone is loud and flaunts their wealth, others tend to distance themselves,” says Klaus Naeve, the head of wealth management at Berenberg, Germany’s oldest private bank. The country’s super-rich have been governed by a code of silence, he explains.
This was often intensified in the past by a desire to disguise the role of particular businesses in the Nazi era. Deep social forces are also at play, with some families guided by traditions of religious self-denial, middle-class prudence and social purpose.
The Leibingers, a strictly Lutheran family that owns the machine-maker Trumpf, with sales of €4bn a year, have a codex which prohibits extravagant purchases or pursuits, frowning on flashy cars, horses or golfing. “They don’t feel that the wealth they have is private luxury,” said a person close to the family’s matriarch, the 60-year-old Nicola Leibinger-Kammüller. “The company has been practising Protestant values from way before anyone knew what corporate social responsibility was”.
German billionaires have admittedly accumulated spectacular art, such as the Impressionist collection acquired by Hopp’s SAP co-founder Hasso Plattner, on display in Potsdam. But this is seen by society less as consumption than as investment for the general good. Some are also well-known philanthropists, including Heinrich Deichmann, head of the family-owned Deichmann shoe empire, where a share of the profits has long gone to a foundation fighting poverty.
But showy consumption is still shunned. Rather than sailing into Saint-Tropez, many rich Germans holiday on Sylt, a Frisian island known for its thatched cottages. It may be expensive and somewhat exclusive, but it hardly exudes glamour. The screws-and-bolts billionaire Reinhold Würth is reportedly the lone German among the world’s publicly known superyacht owners.
The social media age has been accompanied by a surge in consultants offering to help families avoid online publicity about their wealth. “If you have a name like [VW owners] Porsche or Piëch . . . and you are open on Instagram about where you go for a drink or where you go for a little car race — this is not what you want to share with your employees with whom you will enter the next round of union negotiations” says Sabine Rau, an adviser to wealthy families.
For some, security concerns are paramount, following a spate of kidnappings in the 1970s. Susanne Klatten, one of the heirs to the fortune of the Quandt family, which owns roughly 35 per cent of carmaker BMW, often disguised her identity after narrowly avoiding being kidnapped as a teenager. As recently as 2002, the kidnap and grisly killing of 11-year-old Jakob von Metzler — a young member of a banking dynasty — chilled the affluent class.
But Christian Rickens, author of At the Top: How Germany’s Millionaires Really Live says talk of abductions is “wildly exaggerated”. Behind the secrecy is “the urge for control”, he says. “That’s really the driving force, that’s why, for a very long time, we had very few [stock market] flotations in Germany. [Family business owners] hated the thought of sweet-talking investors or shareholders.”
Still, discretion has not always shielded Germany’s rich from uncomfortable queries and its effectiveness may now be weakening. Left-leaning politicians have often played on the mystique of the rich, insinuating that a gilded elite deliberately obscures its opulence to avoid increased taxation. Andrea Nahles, a former minister in the Social Democrats, chancellor Angela Merkel’s coalition partners, once famously referred to the ultra-wealthy as a “black box”, accusing them of reintroducing feudalism by protecting inheritances from the public purse.
DIW’s controversial report triggered new calls for a return to wealth taxes (which were abolished in 1997), including from Saskia Esken, the Social Democrat co-chief. The prospect of next year’s elections possibly forcing Merkel’s centre-right CDU out of office for the first time since 2005 and bringing to power a Social Democrat-led coalition has further alarmed Germany’s wealthy.
Some are fighting back by defending their records in public, albeit cautiously. Focam’s Bechtolsheim is behind a planned book by 20 rich Germans, in which figures such as coffee baron Andreas Jacobs will outline their contributions to society, through job creation and philanthropy. “Most of them are hardworking people who go to their office everyday,” says Bechtolsheim. “They are the first one in the morning to come, the last one to leave. The people working together with them, they know all about that, but the majority of the public haven’t got the foggiest notion.”
But the next generation may be more varied. Rau says heirs are “very heterogeneous in their intention, in their education, in their values, in their behaviour”. Some are unabashed capitalists, such as 27-year-old Verena Bahlsen, a member of a Hamburg biscuit-making family. She has announced her intention to buy a yacht and played down the business’s use of forced labour during world war two, saying it was “before my time” and that “we treated them well”. She later apologised for the remarks, saying “nothing could be further from my mind than to downplay national socialism or its consequences”.
However, others question not just their consumption but even the very basis of commercial wealth. “They are not as modest or as quiet as the good old Kaufmann in Hamburg,” says Naeve, the Berenberg banker. “The younger generation is asking: How did we earn our money?”
These socially aware young people follow the oft-quoted maxim of Goethe’s Faust: “What from your father you’ve inherited, you must earn again, to own it straight.”
Among the most visible is Tobias Merckle. The heir to an industrial fortune — one of the family’s assets, drugs maker Ratiopharm, was sold for €3bn in 2010 — lives, literally, in a prison.
He is the founder of Seehaus, a non-profit organisation that runs juvenile detention centres, focused on reforming inmates, including one in Leonberg where Merckle, aged 49, resides. He believes in higher income taxes but draws the line at wealth levies. “I think capital that is used for entrepreneurial activities should not be taxed higher,” he says. “Family business should not be endangered through inheritance tax.”
Schwarz, the pharma heir, campaigns actively for tougher tax laws. The 32-year-old, whose grandfather was among the founders of Rheinland company Schwarz-Pharma, told FT Wealth that “everything changed” when the family sold the company for $5.6bn in 2006.
Now he spends his time supporting charities, funding environmental movements such as Extinction Rebellion, and lobbying for greater tax transparency. “Germany has a lot of issues around taxation and in many ways behaves like a tax haven,” he says. He criticises those who conceal wealth from the state.
Philanthropy, he insists, is not an adequate counterbalance to inequality, and can act as a “fig leaf”. “I also don’t believe in this idea that the rich will save us,” he says. “I think we need to reclaim our democracy; arguably we live in a plutocracy”.
As to why Germany’s moneyed elders don’t get more involved in this debate, Schwarz says many are reluctant to make enemies by speaking out, particularly if social tensions increase over the Covid-19 pandemic. “It’s a very delicate environment,” he says. “The safer option is to stay quiet.”
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment.
It has been updated to correct the name of Heinz Hermann Thiele.
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