Chanel Owner Shakes-Up NYC Power Base for $86 Billion Empire

(Bloomberg) — For decades, New York City served as the seat of power from where the family behind fashion giant Chanel managed its billions. One member of that dynasty is now building up another outpost in Switzerland.

Gerard Wertheimer, the 75-year-old co-owner of the maker of the famed Chanel No. 5 perfume and the little black dress, has established a Swiss family office to oversee some of his $43 billion fortune, as the clan prepares the ground for a new generation. The tycoon, whose direct family has long been part of Geneva’s elite, signed up former Credit Suisse private banker Frederic Pasteau a few years ago to run the firm, according to people familiar with the matter who didn’t want to be identified discussing non-public matters.

Pasteau, whose LinkedIn profile cites an unnamed family office as his employer, joined with Julie Bozzo-Gros, a Geneva-based partner at the law firm Gros & Waltenspühl whose family has close ties with Gerard and Chanel, to set up at least two investment entities in the Swiss city in late 2025, registry filings show. Earlier this year, one of those entities emerged as the buyer of a 34-million Swiss francs ($40.8 million) office in the heart of Geneva.

The companies add to a Swiss foray by the clan about a decade ago when its family office Mousse Partners established a Geneva entity called Mousseknuckle that, however, has shown few signs of commercial activity. New York-based Mousse Partners was set up by Gerard’s half-brother Charles Heilbronn, 71, in 1991 to oversee the fashion dynasty’s wealth, which according to the Bloomberg Billionaires Index stands at about $86 billion.

Gerard’s latest Swiss move comes as he and his fellow third-generation family members, like several of the world’s richest clans, put in place wealth-management structures for their offspring who are increasingly becoming active in their empires.

“This looks less like a change in Mousse’s investment strategy than a possible early sign of succession planning,” said Marc Debois, founder of FO-Next, an advisory firm for ultra-wealthy families and their investment entities. “The next generation may be taking on more responsibility while the family’s long-term approach stays intact.”

Pasteau, Bozzo-Gros and representatives for Gerard Wertheimer didn’t respond to requests for comment. London-based Chanel declined to comment on matters not directly related to the company’s business, as did Mousse Partners.

For a long time, Mousse Partners has been the family’s main private investment vehicle, with interests in everything from Silicon Valley startups to the storied French bank Rothschild & Co.

Counting Heilbronn’s 40-year-old son Arthur among its executives, it now has scores of employees based out of a glass tower on Manhattan’s “Billionaires’ Row,” helping to make the city a global hub for the family’s fortune. Gerard’s 78-year-old brother Alain, Chanel Ltd.’s executive chairman, has listed his address in the same building, which neighbors a flagship store of the family’s fashion empire.

Geographical diversification is key when a family office plans succession, said Pierre Ricq, a managing director at Union Bancaire Privee.

“Families may live, work and invest across several countries,” he said. “The aim is to give them resilience and freedom of choice, while remaining clear about who makes decisions, how information is shared and what keeps the family connected.”

Also Read: Why Billionaires Have Family Offices and What They Do: QuickTake

Other billionaire clans with multiple family offices include the Pritzker dynasty behind Hyatt hotels and the heirs of Walmart Inc. founder Sam Walton, with the moves often driven through succession plans taking hold alongside fortunes growing in size and complexity.

In the past decade alone, the Wertheimers’ collective net worth has more than tripled, putting them in the company of Middle Eastern royalty in Bloomberg’s annual rankings of the biggest family fortunes. Chanel, which is closely held, has consistently paid out multi-billion-dollar dividends, giving the family ample flexibility to pursue financial interests in different jurisdictions and asset classes.

A Citigroup Inc. survey this year of 351 family office clients found that about a third of them expect leadership transitions within the next five years.

“The time of succession is the most vulnerable time in the life of any family, its leadership and the family office,” said Raphael Amit, a professor of management at the Wharton School.

Another study this year by UBS Group AG of 307 family offices overseeing $1.3 billion each on average found almost all of them had bankable assets in more than one territory, with those in the US and Switzerland most likely to hold investments in the highest number of locations. Like the US, Switzerland is among the world’s leading wealth hubs, thanks to its political stability, high living standards and a deep bench of bankers.

For Gerard, Switzerland is a natural choice. He and his direct family have long been keen members of Geneva’s social, cultural and philanthropic scene. His wife, Valerie, set up a charity to help protect children from online harm in 1999 that hosted a lavish event two years ago featuring a performance by singer Camila Cabello. His son, David, runs an investment firm that has a presence in the city, while Gerard and his daughter Olivia are on the board of Fondation Cassiopée, a Geneva-based nonprofit that provides grants for medical research and culture.

Julie Bozzo-Gros, who was involved in establishing Gerard’s Geneva entities, helps with the foundation’s activities. Her father, Bertrand Gros, a 76-year-old former chairman of Swiss watch giant Rolex SA, became a Chanel director in December 2017, the month that Gerard stepped back from the same role.

The investment entities established by Bozzo-Gros and Pasteau describe their activities as engaging in commercial, financial or real estate transactions, according to their registration filing.

If the clan’s Mousse Partners firm is anything to go by, Gerard’s Swiss family office is likely to cruise below the radar. The website of the New York firm, which bears the name of the French word for “moss,” sheds little light on its investments and makes no mention of the Wertheimers or the Heilbronns.

It mainly shows the image of a prancing moose surrounded by Roman numerals for the year of the firm’s creation in 1991 with the Latin phrase for the well-known proverb: “A rolling stone gathers no moss.”

Mirroring the lineage of the Heilbronn and Wertheimer families, two branches — one with flowers, the other with grapes — surround the animal. At the bottom, the branches hook together to form a shape reflecting Chanel’s famous logo of two interlocked c’s, a nod to the source of a fortune that’s now putting down deeper roots almost 4,000 miles from New York.

–With assistance from Angelina Rascouet, Tara Patel and Katia Porzecanski.

(Updates with details of Gerard’s Chanel directorship in fifth-last paragraph.)

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