The search for partners for the financial service providers of HQ Holding was only partially successful.
(Photo: Oliver Ruether/laif)
Frankfurt The HQ Holding of the Harald Quandt family was only partially successful in the search for partners for their financial service providers. The negotiations with potential investors involved the asset manager HQ Asset Management and the alternative investment manager HQ Capital, both of which are grouped under the umbrella of HQ Holding. As has now become known, there is no future for HQ Asset Management, the unit will be discontinued in the middle of the year.
“Despite intensive negotiations in recent months, we have not been able to find a sustainable solution for the asset manager HQ Asset Management,” says Stefan Keitel, CEO of HQ Holding, in an interview with the Handelsblatt. “It is with a heavy heart that we will have to close the unit on June 30, 2022.” More than 100 million euros are currently being managed, and the team consists of ten employees, according to Keitel.
Although there were around ten serious interested parties for a stake of around 50 percent, none of them were able to meet all the criteria relating to sales issues and the necessary capital backing. “In addition, it was important to us that, in addition to the price, the partner’s DNA should also have matched us.” It would have been absolutely unacceptable for Keitel’s leadership to lose independence in a large corporation, observers believe.
Right from the start, HQ Asset Management had the problem of too little start-up capital for the products. In order to reach a larger circle of institutional investors, the funds under management should have been much higher. For example, HQ Asset Management has two funds on offer, neither of which are big enough for many institutional addresses according to industry experts.
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The HQ AM European Equities works in the analysis with artificial intelligence, the HQ AM Global Equities DM4EM builds a bridge between industrialized and emerging countries. For many professional investors in pension funds, insurance companies and pension schemes, investments only become interesting from a fund size of 100 million euros, which both could not achieve.
Expertise in AI could not be used properly because of Corona
“Because of Corona, we were not able to properly exploit our expertise in the field of artificial intelligence in the fund business. Products and processes are extremely complex and, even in times of zoom conferences, have to be explained ‘face to face’, which was practically impossible during the pandemic,” says Keitel.
In 1954, Harald Quandt and his brother Herbert inherited numerous company holdings from family patriarch Günther Quandt and invested in companies together. After the death of Harald Quandt, the assets were gradually unbundled at the beginning of the 1970s. His brother Herbert took over the stake in BMW, who inherited the shares to his youngest children Stefan Quandt and Susanne Klatten.
In the other branch of the family, Harald’s daughter Gabriele Quandt did not increase her fortune with stocks and bonds, but with entrepreneurial investments. HQ Capital, which is to become a “powerhouse” for private equity, is responsible for the investment strategy. There is a good chance that a partner will be found here.
“At HQ Capital, our private equity specialist, the situation is very different. There are serious prospects for a stake here, which we are now exploring,” says Keitel. “In the first quarter, a decision should be made as to whether HQ Capital will continue on its successful course with or without a partner.” The unit currently manages around nine billion dollars.
Opening for external investors as a result of the generational change
According to Keitel, things are also going well at HQ Trust, the multi-family office, which has also been able to win new customers. “This will be about putting the asset management business on a broader basis in the future, for example with investment concepts for megatrends and alternative asset classes,” explains Keitel, who was CEO of the public-law Deka Investment before moving to the Quandts and was its chief investment strategist.
The opening up to external investors in the Taunus town of Bad Homburg near Frankfurt is also a result of the generation change in the family lines of the Harald Quandt dynasty. The family used to provide the capital for the products and subsidiaries. But we want to do that differently in the future.
More: What investors should look out for when investing in funds.