European Billionaires Emerge With Family Company StakesTom Metcalf
A bull market for luxury goods and rising demand for construction equipment and laboratory services has minted three new European billionaires who hold stakes in family-controlled businesses.
The fortunes of Marina Giori-Swarovski, an heiress to the Swarovski crystal fortune; Mark Bamford, the youngest son of the founder of U.K. backhoe maker JCB Service; and Gilles Martin, who controls French food and drug tester Eurofins Scientific, have each surpassed $1 billion this year, according to data compiled by Bloomberg. None have been cited individually as billionaires on an international wealth ranking.
“Figures suggest family businesses in Europe make up more than 60 percent of firms and a third of employment levels,” Roger Pedder, president of industry lobbying group European Family Businesses, said by phone. “They’re the largest and least reported element of the European economy.”
More than 20 billionaires have been identified within European families in the past 12 months, according to the Bloomberg Billionaires Index, including nine from Germany’s Quandt and Reimann families, two from Italy’s Prada family, seven from the Hoffmann and Oeri families of Switzerland, and three from Denmark’s Kirk Kristiansen family, which owns Lego.
Their emergence comes amid a broader recovery in the European economy. The Stoxx Europe 600 Index is up 10.3 percent in 2013, and the euro has gained 6 percent, the biggest increase this year among the 10 developed-nation countries tracked by Bloomberg Correlation-Weighted Indexes. The dollar has risen 3.2 percent and the yen dropped 9.9 percent.
Family companies represented by Brussels-based European Family Businesses have more than a trillion euros in revenue and make up 9 percent of the European Union’s gross domestic product, according to its website.
The companies are often controlled through holding entities in offshore financial jurisdictions such as Bermuda and Luxembourg. Many are providing greater transparency into their operations as a way of seeking goodwill from the financial community and governments, according to Goran Grosskopf, a Swedish economist who has advised a number of family dynasties in Europe. Such businesses probably won’t publicly disclose ownership details, he said.
“Families prefer to keep this kind information private because of competition, taxation and security,” Grosskopf said. “I hope they will continue to do so. The entrepreneurship these businesses provide are critical to the development of the economy.”
Mark Bamford, 62, is a director of five subsidiaries of Rocester, England-based JCB, Europe’s biggest construction-equipment manufacturer. He inherited at least 25 percent of the group after his father’s death in 2001, according to court documents filed in the U.K. crown dependency of Jersey in 2003.
JCB had revenue of 2.7 billion pounds ($4.3 billion) in 2012, as sales doubled in Africa and jumped 20 percent in the Americas. The stake is valued using published 2012 financials and the average enterprise value-to-earnings before interest, tax, depreciation and amortization and price-to-earnings multiples of two comparable publicly traded companies: Caterpillar Inc. and Komatsu Ltd. Enterprise value is defined as market capitalization plus total debt minus cash.
The company is often associated with Bamford’s 67-year-old billionaire brother, Anthony, who’s been its chairman since 1975. Anthony owns a 200-foot yacht and Barbados home, and was knighted by Queen Elizabeth II in 1990.
Mark keeps a lower profile. He joined the company in 1969 and is on the board of five subsidiaries of JCB, according to regulatory filings at U.K. Companies House. The brothers control JCB through two Bermuda-based entities -- AB Bermuda Trust One and MB Bermuda Trust One -- their father created in 1996, around the time he passed half of JCB to his sons, according to court documents filed in 2002 in Jersey.
When he died in 2001, the elder Bamford stipulated in his will the remaining half of the company be “subject thereto upon trust in equal shares,” for the benefit of his two sons, the documents showed. He made his longtime mistress, Jayne Ellis, the income beneficiary of the shares.
The Bamfords sued over the will’s distribution and reached an out-of-court settlement with Ellis. Anthony Bamford was quoted by the Birmingham Post newspaper in May 2005 saying the “company continues in the exclusive ownership of the Bamford family.”
The exact split between the brothers isn’t disclosed. Anthony is credited with 75 percent of JCB because of his operational control over the business. Mark is assigned the 25 percent he received in his father’s will in 2001.
Nigel Chell, a JCB spokesman, said the Bamfords declined to comment on the calculation of their net worth, and said attributing the company to “Bamford family interests” is the most accurate way to refer to the company’s ownership.
Gilles Martin is chief executive officer of publicly traded Eurofins Scientific Group SE, a French laboratory services provider that moved its headquarters to Luxembourg in 2012. The Martin family controls 43 percent of the company’s shares through Analytical Bioventures SCA, a family investment vehicle.
Martin holds 67.5 percent of that entity, according to Orbis, a database of company information published by Bureau van Dijk, valuing his stake in the company at $1.1 billion. He founded Eurofins in 1987, in his hometown of Nantes, France, as a way to market a technology created by his parents that helped ascertain the sugar content of wine.
The company has 14,000 employees and 180 laboratories, according to its website, and had sales of 1 billion euros ($1.3 billion) in 2012, up 65 percent in five years. It has expanded to include testing and support services for the pharmaceutical, food, environmental and consumer-products industries.
Sylvain Besson, a spokesman for Eurofins, said Martin was traveling and not available for comment, and declined to discuss the family’s personal details. The billionaire’s brother, Yves-Loic, controls about 30 percent of the family business and their sister, Valerie Anne Marie Hanote-Martin controls 1.7 percent. All three siblings serve on the company’s board of directors, and Gilles is chairman.
The brothers were listed on the Challenges Magazine ranking of the richest people in France with a combined fortune of $1.3 billion in July 2013.
Giori-Swarovski, the sister of Gernot Langes-Swarovski, the largest shareholder of Austria-based D. Swarovski KG, the world’s top producer of cut crystal, controls 13 percent of the company, according to Orbis. She owns her stake through Marina Giori Beteiligungs und Verwaltungs GmbH, an Innsbruck, Austria-based holding company.
Swarovski had revenue of 3.1 billion euros in 2012, and is valued at $9 billion, according to data compiled Bloomberg, based on the average enterprise value-to-sales, enterprise value-to-Ebitda, and price-to-earnings multiples of two publicly traded peers: Pandora A/S and Folli Follie SA.
The company’s press office didn’t respond to an e-mail requesting comment on Giori-Swarovski’s net worth.
“Swarovski is a family-owned and run business and not obliged to disclose anything beyond the legal and regulatory obligations,” the company said in a January e-mail. “Any numbers and valuations from third parties are purely speculative.”
Giori-Swarovski is the second billionaire to emerge from the cut-crystal dynasty, which is owned by more than 60 family members. She is the great-granddaughter of Daniel Swarovski, the company’s founder. Her brother, Gernot, owns a 21 percent stake of Swarovski valued at $1.9 billion.
“She’s got a very good relationship with her brother,” Reinhard Berger, president of Liechtenstein-based investment company Valluga AG said in a phone interview. “Together they control about 35 percent of the company and are the strongest branch of the family.”
The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York and listed in U.S. dollars.
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