There’s no common template. While other wealthy dynasties like the Kochs have sought to keep family members atop the business, the Waltons have long outsourced the running of Walmart to professional managers. Steuart and his uncle Rob, 74, sit on the retailer’s board, but most of the extended family focus their energies outside the company.
Any diversification away from Walmart would no doubt be applauded by the family’s risk managers. The stock declined 3% this month through Wednesday amid a wider market swoon, knocking about $5 billion from the family fortune before shares bounced back 6% on Thursday, buoyed by strong second-quarter sales.
For now, the family’s holdings outside of Walmart are a fraction of their overall wealth, which is still anchored by the retailer Sam Walton founded in 1950. Bentonville-based investment vehicle Walton Enterprises LLC holds a 50% stake in Walmart—valued at about $160 billion.
That is shifting. The family’s Walmart stake paid out about $3 billion of dividends over the past year, while the Walton Family Holdings Trust has sold $10 billion of Walmart shares in the past three years. Today about $40 billion of the family’s wealth is held outside of Walmart stock, according to calculations by Bloomberg.
Internal Revenue Service filings show how $9 billion of the Walton fortune was deployed at the end of 2016. They detail the investments of 21 trusts set up by the estates of Sam’s widow Helen and son John.
In some ways, their investments are a microcosm of trends sweeping the wider market. Passive funds predominate, with about $4 billion stashed in vehicles such as Vanguard Emerging Markets ETF or Northern Trust Russell Index. A further $2 billion is in active funds.
Walton Wealth
About $2 billion is in private equity, venture and hedge funds. The money is spread across a host of star names, including $81 million in Cliff Asness’s AQR Capital Management, $190 million in Chase Coleman’s Tiger Global Management and $71 million in Ole Andreas Halvorsen’s Viking Global Investors.
Click here for a full list of investments held by these trusts.
The younger generation is investing some of those returns in their own varied ventures. It’s all part of an approach that enables the family to reposition itself for the future, according to Trott.
“You have family leadership at the board level, non-family management leading the operating company and other family members working as innovative investors and entrepreneurs,” he said.