Rob Walton, left, retired Walmart board chairman, and Steuart Walton, Walmart board member, listen to Walmart’s official annual business and shareholder meeting in Rogers, Arkansas, May 30, 2018. Walmart shareholders from around the world can attend the meetings throughout the week.
Rick T. Wilking | Getty Images
A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for wealthy investors and consumers. Register to receive future editions, straight to your inbox.
Walmart Shares have soared 25% this year, putting America’s largest retailer on track to reach a $1 trillion market cap. At the center of the stock market bonanza are the Walton family, worth $482 billion according to Bloomberg’s estimate, and their personal investment companies.
None of the Waltons — the surviving children and grandchildren of late Walmart founder Sam Walton — work directly for the retailer, although one of them serves on Walmart’s board of directors and a brother-in-law chairs it. But the family still owns a 45% stake in Walmart, and since the start of 2020, the Waltons and their family trust have sold $25.3 billion worth of Walmart stock, according to Smart Insider.
As America’s richest family grew richer, the Waltons turned their growing wealth over to a network of family offices to make investments and launch foundations.
Walton Enterprises, the family office that owns most of its Walmart shares, is the hub of the family’s investments and philanthropy. The remainder is held in a family trust managed by Walton Enterprises. The company declined to comment for this story.
Walton Enterprises goes unnoticed. Few of his investments are disclosed, but public records reveal real estate developments and a $4.4 billion stock portfolio with a conservative mix of ETFs and bond funds.
Simmering bets on sports teams, artificial intelligence startups and clean energy are left to family members and their individual family offices. For example, Rob Walton, son of founder Sam, purchased the NFL’s Denver Broncos for $4.65 billion in 2022 and is worth $137 billion according to Bloomberg. Part of his fortune is managed by private equity firm Madrone Capital Partners, which is the ticket reseller’s largest shareholder. StubHub. His nephew Lukas Walton, worth $48 billion, has made $15 billion in impact investments over the past decade. ranging from sustainable fuel made from wastewater to bonds that fund ocean conservation, according to his family office Builders Vision.
Yet even as they build their own teams and infrastructure, the Waltons continue to rely on Walton Enterprises for much of their wealth management and philanthropy needs.
Experts say this “hub and spoke” model allows the family to benefit from the economies of scale created by their pooled investments, while also allowing family members to pursue their own projects.
The family is able to access top-tier private equity and venture capital funds more easily than it would with smaller individual allocations, according to an adviser familiar with the company’s operations.
“It’s amazing what a billion dollars won’t buy you,” said the adviser, who spoke anonymously because of restrictions imposed by his employer.
It’s a model that more and more ultra-wealthy families are adopting as they seek to leverage their wealth and access the best investment opportunities, while considering the different priorities of the next generation.
Scott Saslow, a consultant and family office principal, said he sees more and more families using this strategy and employs it himself. He shares the costs of some services like accounting with his siblings, but manages his own sustainable investments.
“I think it works best, honestly, when everyone is open about when it makes sense to use central resources and when it doesn’t,” Saslow said. “Families are increasingly finding ways to attract the next generation without being too paternalistic.”
Gregg Lemkau, co-CEO of banking and investment advisory firm BDT & MSD Partners, said Lukas Walton, 39, in particular, is part of a growing cohort of next-generation heirs who are charting a path outside the family business.
“Lukas Walton really brought his passion to impact,” Lemkau told CNBC. “And with Builders Vision, which has enormous scale and impact on the oceans, the planet and agriculture, [Lukas] really had a differentiated impact on something he was passionate about.”
Similarly, Lukas Walton’s cousins Tom Walton and Steuart Walton, through their company RZC Investments, supported a new ATV park near the family’s hometown of Bentonville, Arkansas (which is also home to Walmart’s headquarters). Cousin Ben Walton and his wife, Lucy Ana, use Zoma Capital to combat water scarcity and economic development initiatives in Colorado and Chile.
Lukas Walton’s mother, Christy, invests in conservation efforts through her family office, Innovaciones Alumbra. Also known as iAlumbra, the family office oversees an impact fund that supports ocean health, a charitable foundation and eco-friendly ranches. Christy, the widow of Sam’s son John, is worth an estimated $22.4 billion, according to Bloomberg.
In some ways, Walton Enterprises is more like a multifamily office that serves members of the same family than a traditional single-family office. Sharing a family office allows the Waltons to distribute costs for services such as tax accounting and property management while using their personal businesses to meet their individual needs.
It is a model developed by the Rockefellers. From the founder of Standard Oil, John D. Rockefeller established his family office in the 1880s, his descendants established their own investment and philanthropy companies like Venrock and Rockefeller Brothers Fund.
That said, it comes with many challenges, especially when families move from the second generation to the third, according to family office consultant Dennis Jaffe of BanyanGlobal Family Business Advisors. While second-generation family members grew up in the same household and likely share similar values, the third generation may be more distant and have more disparate interests.
“To keep the family together from the third generation onwards, you have to invest time, money and energy to do it. You have to want to do it,” said Jaffe, who has not worked with the Waltons. “I mean, sometimes they’re difficult people and, to add to all that, they marry people who sometimes can be even more difficult.”
A growing number of wealthy families face this challenge as wealth passes from one generation to the next, Jaffe said. The third generation of a family may feel obligated to keep the family office structure intact, but they may want to make different investment choices, such as launching AI startups and divesting from oil, he said.
Jaffe, who has studied centuries-old families, said most families find compromises between letting the next generation take the reins and squashing their individuality. For example, rather than creating a new family office for a third-generation heir, which is expensive, they can choose to create an investment fund that they can manage, he explained.
As for the Waltons, the next generation is slowly gaining authority. The grandchildren gained voting rights over the family’s Walmart holdings a year ago. Some also took over the family foundation board, and the $8.6 billion philanthropic causes shifted to the left.
“The next generation, when they have large amounts of wealth, is less concerned with how to create more wealth and more concerned with what to do with it,” Jaffe said. “It’s not necessarily a political change, because it’s a different level of worldview. You look to the future. If you’re an elder, you look at what you’ve done and you pat yourself on the back to some extent and you feel very satisfied, very confident.”