Principles of Long-term shareholding: Active ownership, not activism

JSternCo April 2014 new.pptx

Part of what we do is to meet the companies we invest in. Many of them have been in our portfolios for considerable periods of time, and in some cases for many decades. As we write in this month’s insight, we look to have constructive dialogues with the managements, to learn about their businesses and their approaches, and to contribute what we can in terms of our perspective as long-term investors and shareholders.

Principles of long-term shareholding and activism

The Stern family’s core conviction has been to invest based on principles that Maurice Stern established in New York after escaping the German occupation of Paris:  to invest in global companies that can offer quality and value over the long-term.

For a historic banking family that had prospered by financing companies and governments, including establishing banks that are known today as BNP Paribas in France, Deutsche Bank in Germany, Banamex in Mexico or Garanti Bank in Turkey, throughout the 19th and early 20th centuries, the decision to invest its wealth in public markets was a significant step.  It may have been born out of necessity.  It certainly benefitted from the prudence and foresight of having capital in different places.  But mostly it was a recognition of the need to adapt to historical upheaval, changing circumstances and new opportunities.  Building on the lessons of the past, but adapting for the future is why Maurice Stern kept the family’s investments in shares when he returned to France to rebuild the bank and it is why the family has maintained that approach since then.

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