Pieter Slegers — 13 Interesting Holding Companies

Brookfield owns things that economies cannot run without — power grids, pipelines, toll roads, data centres, offices — and it owns them through a stack of separate listed companies that it controls. It holds 73% of its asset-management arm, all of its insurance arm, 60% of infrastructure, 90% of its private-equity arm and 30% of renewables.

That structure is exactly why the shares are cheap. To value Brookfield properly you have to value five different businesses and then work out what the parent's share of each is worth. Most investors will not do that work, so they skip the company altogether — and a stock that people skip trades below what it is worth. The complexity is not a flaw here; it is the reason the opportunity exists.

The number given: the shares cost $42 and the business is reckoned to be worth $68, a 38% discount that is described as unusually wide by the company's own history. The long record supports the estimate — roughly 16.6% a year since 2001, and 19% a year since 1993 on the longer measure quoted in the same post. It is the only name on this list of thirteen that comes with a price, and it is also the one the author already owns.

Constellation buys small software companies — the dull, essential kind that run a golf club's bookings or a water utility's billing — and then leaves them alone to keep collecting their fees. It has done this hundreds of times, and this post files it as a holding company rather than a software company, which is the more honest description.

The machine is organised into six groups, each a business in its own right: Harris (about 30% of revenue, mostly utilities, healthcare and government), Volaris (25%), Topicus (15%, spun off in 2021 so it could use its own shares to pay for bigger European deals), Jonas (15%), Perseus (10%) and Vela (5%).

The record is the strongest on the list and is not disputed anywhere in this archive: about 30% a year since the 2006 listing, a hundredfold return inside fifteen years, and a total gain of more than 18,000%. No price or valuation is attached here — that work appears elsewhere in the archive, where the stock is a top-conviction holding bought during its first serious drawdown.

Investor AB is the Wallenberg family's holding company and has been operating since 1916. Buying it gets you a slice of much of Swedish industry at once — Atlas Copco's tools, ABB's robots, AstraZeneca's medicines.

It has three parts. Roughly 72% is stakes in listed companies it has held for decades. About 19% is Patricia Industries, businesses it owns outright rather than shares in, such as the medical-supplies maker Mölnlycke. The last 9% is a stake in EQT, a private-equity firm — so an owner of Investor AB also quietly owns a piece of a business that charges other people fees.

Shareholders have received about 14.3% a year since 2001. No price or discount is quoted, so this is an introduction rather than a recommendation.

Scottish Mortgage is a London-listed investment trust, which means you buy a share of a fund the way you buy a share of a company. What makes it unusual is that a large slice of what it owns is not listed anywhere — private businesses an ordinary investor simply cannot buy.

The examples given are the famous ones: SpaceX, Anthropic and ByteDance, the owner of TikTok. SpaceX alone is 15.3% of the trust; TSMC is 5.7%, MercadoLibre 4.8%, ByteDance 4.1% and Amazon 4%. The reason to own it, on this argument, is access rather than cheapness.

Long-run performance is about 14.4% a year since 2001. The thing to keep in mind, which the post does not raise, is that the private positions are valued by estimate rather than by a market price — so about a fifth of what you own is worth whatever the manager says it is worth until someone buys it.

MBB is a small German company whose business is buying other German family businesses. The Freimuth family owns 71% of it, and it deliberately targets two long-term themes: the rebuilding of energy infrastructure, and cybersecurity.

It is very concentrated. Friedrich Vorwerk, an energy-infrastructure contractor, is 44.2% of the portfolio. Another 26.9% is simply cash waiting to be spent, and 22.3% is in businesses that are not listed. Aumann is 5.5% and Delignit 1.1%.

Since listing in 2006 it has compounded at 17.4% a year — the best rate of the ten captured names apart from Constellation and Brookfield. The flip side is the obvious one: a buyer is really making two bets, one on a single contractor and one on the family's ability to spend a quarter of the company's value well.

Markel sells specialist insurance. Because customers pay premiums up front and claims are paid later, the company sits on a large pool of other people's money in the meantime — the "float" — and it invests that money rather than leaving it idle.

Tom Gayner runs the investing, and he can put the float into shares of listed companies and into businesses Markel buys outright. Its five largest stock positions are Berkshire Hathaway at 12.8%, Alphabet at 6.9%, Brookfield at 4.8%, Amazon at 3.7% and Deere at 3.3% — which is why it is called a mini Berkshire Hathaway.

The record is the sober part: about 9.9% a year since 2001, below the US market over the same period. The post prints the number and does not discuss it.

Ackermans & van Haaren is a Belgian family-controlled holding company that owns a genuinely odd mixture of businesses: private banks, dredging and marine-engineering contractors, property, and a private-equity arm.

By value the two that matter are private banking at 33% and marine engineering and contracting at 32%; growth capital is 18%, real estate 10% and energy and resources 7%. In other words, two-thirds of it is one wealth-management business and one heavy-construction business — an unusual pairing that gives it very little in common with anything else on the list.

Shareholders have received about 11.4% a year since 2001. It is the only entry given by business segment rather than by named holding, and no valuation is offered.

Sofina is a Belgian investment company controlled by the Boël family. It started in 1898 financing electricity networks and tram lines across Europe and Latin America, moved into listed shares from the 1950s, and has since moved again into private companies.

Today it backs consumer, digital, education and healthcare businesses across Europe, North America and Asia. Its five largest direct investments are ByteDance at 7%, the schools group Cognita at 6%, the skincare brand Nuxe at 3.7%, Drylock Technologies at 3% and the online university group Proeduca at 2% — four of the five unlisted.

The return has been about 8.6% a year since 2001, the weakest of the captured names. What you are really buying is a family's private-investment book at whatever price the stock market puts on it, which is the argument for the category and also its main risk.

Exor is the Agnelli family's holding company — the family behind Fiat — and they still own half of it. It holds large stakes in old-economy businesses: Ferrari at 32.4% of the portfolio, Stellantis at 11.5%, Philips at 11.4%, its own asset manager Lingotto at 11.3% and the tractor maker CNH at 7.8%.

In practice a third of Exor is Ferrari. So although it looks like a diversified industrial holding, its value is driven mostly by one luxury-goods share, with the rest as ballast plus about 5% cash.

The number the post prints without softening it: since Exor listed in its current form in 2022, the shares have compounded at 1.5% a year. That makes it the clear laggard of the list, and no discount to net asset value — the usual reason to own Exor — is quoted to offset it.

Brederode is a Belgian holding company controlled by the Van der Mersch family, who own 55% of it. Nearly two-thirds of what it owns — 62.9% — is money committed to private-equity funds run by other people; the remaining 37.1% is ordinary listed shares.

The listed side is conservative and concentrated: Alphabet at 15.1%, the Spanish utility Iberdrola at 11.2%, Mastercard at 9.7%, the Italian utility Enel at 7.8% and Novartis at 6.2%.

Returns have been about 8.5% a year since 2001. The honest way to describe it is a listed wrapper around a fund-of-funds: an easy route into private equity for a small investor, with two layers of fees that this post does not mention.