While the French budget debate regularly brings up the issue of taxing the “ultra-rich”—particularly in the wake of Gabriel Zucman’s proposals—public discourse focuses almost exclusively on the downstream end of the economic system. The central question is: How should income and wealth be taxed once they have been accumulated?

This approach overlooks a crucial point that occurs earlier in the process. The accumulation of wealth does not take place at the individual level, but first within societies, before gradually being transformed into private wealth.

One of the key instruments is the holding company—a company that produces nothing and whose sole purpose is to hold ownership interests in other companies. Understanding its role shifts the focus away from distributional issues alone and toward the mechanisms that underlie the accumulation of wealth.

The issue I examined in my dissertation: understanding its role in the gradual separation of shareholders’ personal liability and assets, on the one hand, and corporate social responsibility, on the other. From the factory to the subsidiary, from the industrial group to the asset portfolio, and then to the “family office,” holding company structures organize the increasing abstraction of capital, transforming collectively produced value into lasting private wealth.

A look back at the history of holding companies, from the "commendas" of the Middle Ages to^21st-centuryfamily offices, including joint-stock companies during the Industrial Revolution.

From the Commenda in the Middle Ages to the Industrial Revolution

Before we talk about history, let's talk about economic theory.

First, as soon as capital is tied up in an economic activity—or capitalized in accounting terms—such as the spice trade, it is no longer available for other, potentially more profitable investments. Second, in order to be valued as private wealth and passed on to heirs, the capital must ultimately be separated from the business. A holding company resolves this paradox, which is as old as capitalism itself: separating financial liability between the professional and personal spheres.

As early as the^10thcentury, arrangements such as the commenda established a separation between the investor, who provided the capital, and the operator, who carried out the commercial venture—most often in the form of a sea voyage. These arrangements flourished in Venice and Genoa, contributing to the prosperity of both cities.

Beginning in the^15thcentury, joint-stock companies emerged against the backdrop of colonial conquests. This was the legal model for the royal monopolies known as the English, Dutch, and French East and West India Companies. This legal form introduced the concept of divisible capital in the context of uncertain trade, which required the commitment of substantial capital.

In the^19thcentury, alongside the industrialization movement in Europe, this separation of assets from economic liability was formalized through specific legal entities.

Formation of Corporations

The French Commercial Code of 1807 introduced a clear distinction between private assets and economic activity, paving the way for the creation of public limited companies (SA). By removing the shareholders’ names from the company’s legal name, the corporation became an autonomous legal entity with its own liability. This new situation led many individual investors to profit from a company’s earnings until it filed for bankruptcy, without bearing any of the consequences.

The rise of corporations was facilitated by the 1864 Commercial Companies Act. This legal structure allows a company to raise capital from anonymous investors outside the company through the capital markets—in the form of stocks or bonds. It became the dominant form of business organization after World War II.

In practical terms, the corporation—by enabling financing on a broader basis—also creates a paradox. On the one hand, the owners of the capital are no longer personally liable for the capital tied up in the company. On the other hand, a new problem arises: How can the families of long-standing shareholders maintain control of the capital as the number of investors increases?

It was in this context that the first legal framework for the family’s capital began to take shape. While it would be an anachronism to speak of holding companies at that time, the foundations were laid.

Construction of Industrial Complexes

In France, the formation of large industrial groups began relatively late, in the 1960s and 1970s, driven by the government and investment banks such as Lazare and Rothschild. Mergers, acquisitions, and restructurings gave rise to industrial conglomerates of unprecedented size, almost always headed by holding companies.

The 1965 tax reform facilitated the creation and organization of the large corporate groups we know today. By reducing the tax on dividends distributed by subsidiaries to their parent companies, it encouraged firms to structure themselves into multiple tiers of interlocking companies. A pyramid-like structure became widespread, gradually replacing traditional financial structures, in which shareholders personally owned the shares of companies within the family-owned group.

The holding company serves as an umbrella structure, centralizing ownership, cash flow, and decision-making authority, while maintaining the legal autonomy of its subsidiaries. These group holding companies fulfill several functions: financial leverage, a vehicle for external growth and asset arbitrage, and organizational separation between ownership of capital and productive activity.

The creation of Peugeot Société anonyme in 1966 as the parent company of the family-owned industrial group is a prime example of this. The various business activities—bicycles, tooling, and automobiles—had previously been managed by independent companies owned directly by shareholders from different branches of the family. The holding company Peugeot SA is itself controlled by Foncière et Financière de Participation (FFP), a family-controlled holding company founded in 1929. This tax and legal structure ensures the unification of financial management across the various subsidiaries and the centralization of the family’s capital management.

Empires of Capital

Beginning in the 1990s, amid economic stagnation, the acceleration of capital accumulation, and the financialization of the economy, a number of hostile takeovers took place. French conglomerates that are now major players, such as LVMH, Lagardère, and Bolloré, were formed through large-scale financial transactions of varying degrees of aggressiveness.

These transactions are carried out through holding companies, which allow for the centralization of cash flow and, in effect, provide leverage for these investments—using debt to increase the company’s investment capacity. Legally and nominally independent, these entities make it possible to acquire a company’s shares more discreetly than through a company bearing the family name. This is the strategy the Bolloré Group has employed on numerous occasions.

Holding companies are thus becoming increasingly detached from issues of industrial development and increasingly focused on financial optimization within the framework of these new capital empires.

Private Equity Firm

These holding companies are gradually being transformed into private equity firms. They serve as vehicles for asset diversification strategies and for a profound restructuring of capital, which is associated with financialization.

A holding company can serve as a vehicle for diversifying family capital, which does not preclude maintaining operational control. This is the case with the FFP Group, the Peugeot family’s investment company and the predecessor of Peugeot Invest. Starting in the 2000s, the trend toward financial diversification accelerated: the holding company acquired stakes in numerous groups, such as Seb, Orpea, Ipsos, DKSH, Dassault Real Estate, Zodiac, Tikehau, Totan Eren, Spie, real estate companies, private equity funds, and others. This major shift went hand in hand with the Peugeot family’s holding company retaining significant control over the PSA Group—now Stellantis—(see below for this holding company’s investments in 2019).

Family Office: Holding Companies of Holding Companies

At the highest levels, new structures—such as “family offices”—have now emerged. They complete the transformation of economic capital into private wealth for many French dynasties at the top of the rankings of the world’s wealthiest families. In addition to wealth management, these structures offer a variety of financial services as well as services to manage relationships between shareholders and family members within these wealthy families.

This is a widespread phenomenon. The wealth of France’s leading dynasties is now organized around holding companies that form structures of varying complexity, but always with a primary financial entity at the center: H51 Holding for the Hermès family, Société Agache for the Arnault family, Téthys Invest for the Bettencourt-Meyers family, GIMD for the Dassault family, Merit France for the Saadé family, NJJ Holding for the Niel family, and so on.

Within these family-run empires, the tiers of holding companies serve as the ladder through which value generated in the real economy is transformed into private wealth. Therefore, analyzing economic issues by focusing solely on the lowest level—that of industrial subsidiaries—is far from comprehensive.

Placing holding companies back at the center of the analysis thus helps us understand that the accumulation of wealth is neither natural nor automatic, but rather the result of a specific institutional structure that is largely invisible in public discourse.