Audio Archives
Client Letters
OID Features Online
OID.com Exclusive
Features
Indexes:
Investors
Funds et al.
Companies &
Investments
Contact Us
About Your
User Name
& Password
Free Reprint
Online Excerpts
Investors in
Our Latest Edition
Companies &
Investments in
Our Latest Edition
About OID
Subscribe
Online Advertising
Online Classifieds
Employment
Opportunities
Portfolio Reports
Home Page
SOGEN FUNDS'
JEAN-MARIE EVEILLARD ET AL.
(continued from preceding
page)
AND THESE AREN'T SOME PASSIVE PORTFOLIOS.
UNDERLYING VALUE HAS COMPOUNDED VERY NICELY.
OID: And you said that these holding companies haue actually compounded their underlying values nicely?
Eveillard: Yes. They're not just sitting on a portfolio that doesn't change over time. They invest and disinvest. They don't trade those securities actively, of course - because oftentimes these are very substantial stakes. Still, every now and then, they manage to sell one and buy another major stake. So that's how they've added value.
The major shareholder of Rue Imperiale de Lyon, incidentally, is Lazard Freres - the Paris-based investment banking firm.
OID: And I gather that you expect the future returns of these holding companies under their watch to continue being above average, if not spectacular.
Eveillard: Well, they have their own money at stake, they're very shrewd and they've done very well in the past. So, at the very least, we think it's a big positive.
We believe they have the ability to sell stakes from time to time at a premium and redeploy the capital into stakes which they can buy at more attractive prices. And sometimes they get involved with the various managements - at least in terms of strategy.
OID: And you're not aware of any problems involving excessive compensation or anything else detrimental to other shareholders?
Eveillard: No, I'm not.
OID: So it's not like buying something mediocre at a discount and praying that the discount will close so you can sell it and have the privilege of paying taxes.
Eveillard: Exactly. It's a successful, well managed operation which can be bought at a substantial discount.
OID: Why, then, are they selling at those discounts?
Eveillard: The only answer I can give is that it's one of the inefficiencies of the French stock market. French investors traditionally have disliked buying into the stocks of holding companies that own a variety of stakes. And the French have always insisted that the stocks of their holding companies should sell at a discount to their net asset value. Maybe there isn't enough simplicity to it. Maybe there's a taint in people's minds about them being conglomerates.
OID: Which sounds like it could be a good reason - given the lack of focus, etc., which often results.
Eveillard: But they aren't. Each of them has their own independent or relatively independent management. And EuraFrance's management gets involved in them only when they feel that they need to get involved.
OID: I gather, then, that the underlying companies are reasonably well run.
Eveillard: I think the answer is yes. If they weren't,
Page 9 of 20
|
(Return to Table of Contents) |
(continue to the next page) |
©Copyright 1996-2008 Outstanding Investor Digest, Inc. All rights reserved.
295 Greenwich St., Box 282, New York, NY 10007 (212) 925-3885