Long-term investment focus
Superior revenue growth, profitability and cash flow generation, together with greater focus on and investment in research and development.
Our approach
Investment Philosophy
A unique
investment philosophy.
Our investment universe consists of publicly traded, family-controlled holding companies with portfolios of high-quality listed and/or unlisted companies, a strong track record of capital allocation, trading at a discount to fair value and with solid balance sheets.
01 / Equities & time
Compounding capital
in the long term
Long-term equity investment is a differentiating factor in compounding capital.
We view equities as the most attractive real asset in terms of long-term profitability, and real assets as a means of protecting value against inflation.
It is important to stay invested and compound value over the long term. Compound capitalisation generates returns on previous returns, with much of the resulting wealth creation occurring in the later years of an investment.
Our perspective
Stay invested for the long term and allow capital to compound.
02 / The family advantage
The Family
Advantage
Our investment case for publicly traded, family-controlled companies rests on their record of long-term performance, supported by a long-term investment focus, greater risk aversion and a heritage dimension.
Frugality & prudence
Frugality, greater prudence in decision-making and risk aversion, supported by lower levels of financial leverage.
Heritage dimension
Greater social responsibility towards employees, customers, suppliers and other stakeholders, more effective governance and talent retention.
Their name is often on the door.
03 / Investment selection
Five criteria.
One investment discipline.
Investment characteristics to consider within the universe of publicly traded, family-controlled companies.
Controlling family or shareholder
Presence of a controlling family or shareholder with a long-term vocation and strategic vision.
High-quality portfolio
A high-quality portfolio of listed and/or unlisted companies with the potential for sustained, above-average, long-term growth.
Long-term capital allocation
A strong track record of capital allocation with returns in excess of broader equity markets.
Discount to NAV
Investment in companies trading at a discount to their net asset value, preferably with a catalyst to reduce the discount.
Balance sheet strength
A solid balance sheet with limited financial indebtedness.
04 / Our investment opportunity
Competitive
advantage
Our competitive advantage is supported by general misconceptions about family-controlled holding companies. Holding company structures attract inefficiencies and misconceptions that can create investment opportunities.
Main misconceptionsFamily-controlled holding companies
Family control
Family involvement is fundamentally under-appreciated despite a record of value creation and outperformance.
A complex portfolio
The high quality of listed and unlisted assets can be missed because of holding company structures.
Diversification inside a holding company
Investors often prefer to diversify assets directly rather than through holding companies.
Limited coverage
Family-controlled holding companies are under-researched, overlooked and inefficiently priced.
Two potential sources of return
The combination of a portfolio of high-quality companies managed by long-term capital allocators creates the potential for superior asset value growth. Investing in companies that trade at a discount to net asset value provides an additional potential source of return.
Neither is guaranteed. Discounts can persist or widen.
05 / HoldCos & serial acquirers
An additional differentiating layer:
HoldCos & Serial Acquirers
An additional characteristic of this investment universe is that it mainly comprises serial-acquirer holding companies with portfolios of unrelated businesses. These models differ in their degree of operational integration.
Roll-up
Non-differentiated products, with scale-driven synergy targets.
Platform
Product differentiation, subsidiary clustering and shared operational excellence programmes.
Accumulator
Product differentiation, little to no integration and shared operational excellence programmes.
Holding company
A diversified business portfolio, with influence through board representation.
The principles behind the portfolio
Explore our fundamentals Investment Fundamentals
The investment case
A long-term
perspective.
Explore our investment strategy, holding company universe and approach to permanent capital.
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