This article directly stems from the research process for our European single family office database. Our list of European single family offices includes the most important family investment vehicles that invest in various areas, such as financial markets, real estate, venture capital, private equity and renewables.
Where does Amancio Ortega’s wealth stem from?
Amancio Ortega grew up in very humble surroundings, as the son of a railway employee starting to work as an errand boy at the age of 14 for a shirt maker in his hometown A Coruña in Galicia in Northern Spain. This was his first contact with the textile industry. In 1963 his entrepreneurial journey began as a manufacturer of bathrobes. Until in 1972 he opened Confecciones GOA (his initials reverted) as the first proper textile company and the first member of the Inditex Group, holding of his fashion companies. Finally in 1975 started the entrepreneurial success story of Zara. He is famously shy and avoids any kind of press or media. Until the 1990s the public did not even know who owned the Inditex Group, the fashion champion coming out of nowhere. As of 2019, according to Forbes his wealth is estimated at 65 billion US$ making him the sixth richest man in the world, and the richest person in Europe. He still owns nearly 60% of Inditex giving him undisputed and direct control over the fashion company.
How did the Inditex group with fashion labels like Zara develop?
Inditex was found as a holding in 1985 for today 8 brands among them, Zara is today the most important one and generates 65% of the turnover. The Inditex holding owns the brands Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque has over 7000 stores in 96 countries around the world. All eight brands retail fashion, mainly for people, but with Zara Home also entered the home accessory and decoration market. In 2011 the Inditex Group overtook GAP as the largest fashion producer worldwide making them the most important fashion company in the world. Under the tenure of the latest CEO Pablo Isla, the number of stores more than doubled from 2692 stores in 2005 to 7013 stores at the end of 2015. In 2018 the turnover of the company was more than 26 billion euros, 3,2 billion in online sales. According to analysts, the short lead time is the key to the success of the group, being able to deliver “fast fashion” and renew their offer in stores every two weeks, producing much faster than competitors such as H&M.
Does the Ortega family have a Single Family Office?
The Ortega family manages its wealth through its single family office Pontegadea Investments SL. It is an investment firm fully focused on real estate investments and totals over 13 billion US$ in net worth. The Ortega single family office has the greatest portfolio in property and inmoveables among the European billionaires. The investment branch almost exclusively focuses on buildings, clearly showing a long-term strategy when it comes to the management of the patrimony of the entrepeneurial success of Inditex. The Single office began, still under Ortegas tenure, to acquire prime real estate objects in Spains’ metropoles most important high streets, such as Calle Gran Vía in Madrid or Passeig de Gracia in Barcelona. Later and with increasing dividends received from Inditex, Pontegadea was able to diversify and amplify their real estate portfolio all over the world. Before the acquisition of the Troy Block of Amazon, their biggest real estate deal was the buying of the Adelphi building in London for more than 680 million Euros.
How does the Ortega family invest?
Their investment focus lays clearly on landmark real estate property where they become owner and generate substantial income in rents. One outstanding property they bought where a substantial share of the Amazon HQ in Seattle worth over 740 million US$ making them the greatest Amazon landlord. Already in 2017 the investment fond generated income of 385 million € only in rents, making real estate investments a long-term very secure way to invest and preserve the family patrimony. Pontegadea has its clear investment focus on both sides of the Atlantic and a minor part in Asia. 51% stems from Europe, 46% from the Americas and only 3% stems from real estate investments in Asia. What is noteworthy, is the clear strategy which was already seen before by the acquisition of stores for Zara, always first class, prime location, within a city guaranteeing stable and high returns. As of 2018 the value of the assets held by Pontegadea is figured with 29 billion euros, the equity over 21 billion euros. One notable exception which was not in the real estate sector, was the investment in a share of 9.99% of the physical infrastructure of Telefónica, making them the part owner of the submarine cables, the glass fiber net for high-speed internet and antennas for mobile phone data coverage.
This article is part of our detailed report “The single family offices of Europe’s richest families“.
Picture source: Social.Cut