Amancio Ortega: Is there a single family office?

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.

Update 2024: Since 2019 Ortega could icrease his wealth to $109, which makes him the 13th richest person on the planet.

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.

Update 2024: While the turnover has remained constant at 26 billion dollars, the number of ZARA stores has decreased and now stands at 3000 worldwide.

Does the Ortega family have a Single Family Office?

The Ortega family manages its assets through its single family office, Pontegadea Investments SL. It is an investment company fully dedicated to real estate investments. The Ortega single family office has the largest portfolio of real estate and property among European billionaires. The investment arm focuses almost exclusively on buildings, clearly demonstrating a long-term strategy for managing the legacy of Inditex’s entrepreneurial success. Under Ortega’s leadership, the single office began acquiring prime properties in the main shopping streets of the Spanish capital, such as Gran Vía in Madrid and Passeig de Gracia in Barcelona. Later, and with increasing dividends from Inditex, Pontegadea was able to diversify and expand its property portfolio around the world. Prior to the acquisition of Amazon’s Troy Block, its largest property deal was the purchase of the Adelphi building in London for more than 680 million euros.

How does the Ortega family invest?

Their investment focus is clearly on landmark properties where they can take ownership and generate substantial rental income. One outstanding property they acquired was a substantial portion of Amazon’s headquarters in Seattle, worth more than US$740 million, making them Amazon’s largest landlord. Already in 2017, the investment fund generated an income of €385 million in rents alone, making property investment a very safe way to invest in the long term and preserve the family legacy. Pontegadea has a clear investment focus on both sides of the Atlantic and a small part in Asia. 51% comes from Europe, 46% from America and only 3% from property investments in Asia. It is worth noting that this is a clear strategy, already seen in the acquisition of stores for Zara, always in prime locations in a city that guarantees stable and high returns. As of 2018, the value of the assets held by Pontegadea is estimated at 29 billion euros, with equity of over 21 billion euros. A notable exception, not in the real estate sector, was the investment in a 9.99% share of Telefónica’s physical infrastructure, making it co-owner of the submarine cables, the fibre optic network for high-speed internet and the antennas for mobile data coverage.

This article is part of our detailed report “The single family offices of Europe’s richest families“.

Picture source: Social.Cut

Featured: Our Single Family Offices Europe Database