Bernard Arnault: Is there a Single Family Office?

How did Bernard Arnault earn his fortune?

Bernard Arnault, a graduate engineer, was born to a father who owned a construction company. He started working in his father’s company and eventually replaced his father as director of “ferret-savinel”, running the company from 1978 to 1984. His first business successes were in the construction of holiday homes, first on the French Riviera and then in Palm Beach, Florida, which made him a wealthy builder. His entry into the business he is most associated with today, the fashion and luxury industry, began in 1984 when he was able to amass enough capital to take over the troubled fashion company Boussac/Saint Fréres, which owned, among other things, Dior. He restructured the fashion company and sold off most of it in order to move into the luxury sector with the acquisition of Céline, a luxury fashion brand. In 1987, Louis Vuitton and Moet Hennessy merged to avoid a hostile takeover, but the owners did not get on well. While mediating the conflict, he was able to increase his stake in the company, and in 1989, with a 43.5% stake, he was elected chairman of the board against the express wishes of the Louis Vuitton and Moet Hennessy families. Since then, LVMH has been his main company, and through acquisitions and mergers it has become the world’s largest luxury fashion company. In this article, we find out if there is a Arnault family office.

Update 2024:According to Forbes, Berard Arnault is worth an estimated $233 billion, making him the richest man in the world.

How did the LVMH with luxury labels like Louis Vuitton develop?

LVMH, as mentioned above, was a merger between Louis Vuitton, the luxury luggage manufacturer, and Moet Hennessy, the luxury champagne and cognac producer. Acquired by Arnault in 1989, they have since merged and grown to a portfolio of more than 80 brands in six groups: Wines and Spirits, mainly Champagne or other wine derivatives; Selective Retailing; Fashion & Leather Goods; Watches & Jewellery; Perfumes & Cosmetics; and Other Activities, such as a newspaper. Brands owned by LVMH include Dom Pérignon, Veuve Cliquot, Bvlgari, Dior, Louis Vuitton, Rimova, TAG Heuer and many others. The company was not built and grown from scratch, but over time and by investing a lot of capital, it acquired luxury goods producers that were traditionally family businesses or small artisans. In 2018, it generated revenues of 46.8 billion euros and a profit of 10 billion euros. The strongest brand in the portfolio remains Louis Vuitton and, for watches, TAG Heuer, with a 4% share of the luxury watch market.

Does the Arnault family have a Single Family Office?

The Arnault family does, and it is called Groupe Arnault. Its focus, or known focus, is technology, with a wide range of investments in start-ups. According to the Financial Times, the family office is active in investing in start-ups, but traditionally in later rounds, Series B onwards, to give capital. Their investments have included Netflix and Airbnb as the most high profile companies. In 2017, Aglaé Ventures was launched, a fund focused on investing in early stage startups, diversifying the investment strategy and trying to support and improve the European startup ecosystem as a competitor to Silicon Valley. Aglaé Ventures will invest between 200,000 and 2 million euros in early-stage companies, with a strong focus on and support for the internationalisation and growth of start-ups.

Update 2024: The Arnault family office is focusing investments in the AI vertical. One prominent portfolio company that was funded in 2024 is Holistic AI, which is working on full artificial general intelligence.

How does the Arnault family invest?

The Arnault family’s focus on technology is said to be its contribution to the development of high technology in Europe and to better compete in a sector considered to be crucial to the future of the economy. The family office has also set up a $12 billion private equity fund in partnership with L Catterton to invest in consumer markets in emerging economies. Consumer brands and especially the middle markets, are seen as underdeveloped and L Catterton sees potential for further investment. The fund is 60% owned by Catterton and 40% jointly owned by Groupe Arnault and LVMH. It is said to combine both companies’ assets in real estate and company shares in the American and European markets. Catterton Funds had been a fund in which LVMH had invested since the 1980s and now t merged its assets with Groupe Arnault and LVMH to create more synergies and they created L Catterton.

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

Picture source: Christian Wiediger