The family behind Rolex has transferred its inheritance into a shared investment structure designed to preserve and grow wealth across generations. Perpetual, founded in Munich in 2015, manages assets in the low single-digit billions for around 90 members of the Rolex family and, since 2023, for almost 100 external investors.
The family’s financial assets are held separately from Rolex itself. The watch company is fully owned by the charitable Hans Wilsdorf Foundation, established by Rolex founder Hans Wilsdorf, who died childless in 1960. Today’s family descends from his two siblings and is supported by several family foundations intended to provide for relatives without allowing individuals to exhaust the underlying capital.
Perpetual’s structure emerged after family members living in Germany, Switzerland and the United States had used different private-banking arrangements. The aim was to create a common investment framework while allowing members to adapt their portfolios to their individual circumstances. The family compares the approach with maintaining a farm for future generations while consuming its harvest.
The family office uses five funds. Two invest in global equities and bonds: a more conservative fund has an equity allocation of about 35 percent, while the more aggressive fund invests around 65 percent in equities. Three additional funds focus on private markets: private equity, private credit and infrastructure.
The investment building blocks are the same for all family members, but their weighting differs. Older investors or those needing quicker access to their money can allocate more to liquid funds. Younger relatives with longer investment horizons can assign more capital to private-market strategies. Perpetual says its own family-office structure is generally economically viable only from around €600 million in investable assets, while external investors are advised to commit at least €1 million.
The strategy follows the endowment model associated with major US universities such as Yale and Harvard. These institutions seek to finance ongoing spending while preserving the purchasing power of their endowments for future generations. Unlike a traditional portfolio dominated by listed stocks and bonds, the endowment approach places greater emphasis on alternative investments.
Around 65 percent of Perpetual’s assets are allocated to its three private-market funds. Investment chief Christian Wiehenkamp argues that less liquid assets can offer an illiquidity premium, compensating investors for giving up immediate access to their capital. Perpetual’s long-term horizon allows it to accept this limited liquidity and take on more risk.
The investment team focuses on diversifying risks rather than simply counting asset classes. It therefore looks for investments whose performance is not driven by the same underlying economic factors. In its private-credit strategy, for example, the firm invests in aircraft leasing and music rights alongside more conventional opportunities.
Aircraft leasing is presented as an example of an asset with continuing operational demand. After Spirit Airlines became insolvent, one aircraft was quickly secured and later leased to an airline in Vietnam. The key factor, according to Wiehenkamp, was finding a new paying user for the plane.
Through specialist funds and co-investments, Perpetual also has exposure to music rights connected with artists including The Weeknd and Daddy Yankee. Royalties generated when songs are streamed or played on the radio can provide recurring income, which Wiehenkamp compares with the coupon payments of a bond. The rights may also be sold later.
The infrastructure fund invests in assets such as cold-storage facilities and buses used for rail-replacement services between Hamburg and Berlin. It also provides exposure to a portfolio of firefighting and rescue helicopters operating in southern France and Spain. Their availability is paid for by governments under long-term contracts.
Perpetual relies on external managers for specialist expertise and access to private-market transactions. The firm’s managing director, according to the report, considers a strong network particularly important in markets where access to sought-after funds can be difficult.
Performance has varied by strategy. Over the previous three years, the liquid mixed fund with 65 percent equities and 35 percent bonds delivered the strongest result, returning almost 15 percent annually. Wiehenkamp described this as well above the fund’s long-term expectation of about 7 percent per year.
The credit fund returned nearly 10 percent annually over the same period, slightly exceeding its target and standing just ahead of the private-equity fund. Returns from company investments were more limited, while the credit fund benefited from its exposure to alternative sources of income such as aircraft leasing and music rights.
Perpetual’s investment team stresses that such results cannot be expected every year. Even the mixed fund could lose 20 percent in a single year, making discipline and adherence to the agreed long-term strategy central to the family’s approach.
Sources: Handelsblatt.