 | | | | | | | | | ODDO ET CIE
12 bd de la Madeleine
75440 Paris Cedex 09
Tél. 01 44 51 85 00
Fax. 01 44 51 85 10
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| Family-owned companies, a winning concept | | | > What is a family-owned company?
A family-owned company is a company controlled by a family, which has the power to appoint or dismiss directors, and which constitutes the majority of the family's assets. In addition, these companies must have a stable ownership structure and the family must be willing to be a very long-term shareholder.
> Family-owned companies are increasing in value
In France, family-run companies are riding on the crest of a wave. Between 1990 and 2006, they advanced 639% versus 292% for the CAC. This major growth differential proves the strength of these companies over the long term.
The Family-owned company sector is by no means a French exception and is a genuine reservoir that can be exploited throughout the whole eurozone, where more than half of listed companies are family-owned. As a result, we believe family-owned companies are a winning concept not only France but in the wider area represented by the eurozone. | |
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| Oddo AM, an expert in family-owned companies | | |
The Oddo group is a company 80%-owned and controlled by the founding family and its directors. Our group therefore has a natural ability to identify the companies that resemble it the most.
The quality of our theme-based equity fund management and our recognised expertise in stock-picking French and European stocks were recently acknowledged by several awards, amongst which:
> The 2007 Grand Prix Eurofonds: the best European asset management company over four years
> The 2007 Alpha League Table: the n°1 equity fund management company
> Trophée d'or - Le Revenu, Palmarès Sicav & Fonds 2007: best overall performance over three years
> The 2006 Lipper Fund Award prize for Oddo Avenir Euro (European equities fund)
Combining these two specific strengths, Oddo Asset Management underlined its expertise in the domain of family-owned companies by creating a fund specially dedicated to French family-run stocks in 1996. This fund, called Oddo Génération, outperforms its benchmark OSF (Oddo Family-run companies) index. Between 1996 and 2006,Oddo Génération advanced 230% versus 189% for its benchmark index.
Due to this outperformance and the existence of a strong family-run business sector in the eurozone, we decided to launch the Oddo Génération Euro fund in 2007. | |
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| Oddo Génération Euro: focused on eurozone family-owned stocks
| | | Oddo Génération Euro is a fund invested in family-owned stocks of the eurozone. Its aim is to beat its benchmark index, the OSF Euro (see chart) over a period of five years or more. The fund's stock universe is comprised of family-owned companies of the eurozone, namely 300 stocks with market caps varying between euros 500m and more than euros 50bn. Oddo Génération Euro's portfolio, which contains between 50 and 60 different stocks, is comprised of family-run companies diversified in terms of capitalisation, business sector and geographical zone.
> Precise analysis that combines various levels of expertise
Drawing on various levels of expertise within the Oddo group, and more particularly on that of the quantitative and mid cap stocks fund management teams,Oddo Génération Euro's fund managers carry out fundamental analysis of the companies in its universe: quantitative rating, analysis of stock, meetings with management. A valuation for each company is then determined (peer multiples, DCF, etc.) in order to determine the levels of investment. On this basis, and using four traditional investment criteria - fundamentals, management, valuation and momentum the fund managers build up a portfolio of between 50 and 60 stocks by using rigorous stock selection methods.
> The OSF Euro, the n°1 index for European family-owned companies
Oddo AM has created an index called OSF Euro (Oddo Sociétés Familiales Euro), which comprises 81 family-owned companies (see definition above) of the eurozone. The latter must satisfy two main criteria: they must belong to the DJ Euro Stoxx and be the main top holding company in a holding company structure (e.g. Bouygues not TF1, LVMH not Christian Dior). The index is well balanced out. The average market capitalisation of the companies comprising the index is euros 13bn - 70% of the companies have a market capitalisation of above euros 5bn and the three heavyweights of the index (Santander, L'Oréal and Arcelor Mittal) have more than euros 50bn. Geographical weightings are limited, apart from Spain, which is overweight due to the recent growth by construction and property groups which are, for the most part, family-owned companies. However, sectoral weightings are more marked, with non-cyclical groups, particularly the food retailers (Carrefour, Colruyt etc) being overweight and the historically regulated sectors (banks, insurance, utilities) being underweight. Since 1990, the OSF Euro index has outperformed the DJ Euro Stoxx by an average 2.3% per year. | |
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| Fund & index performance | | | Oddo Génération Euro's performance has been very encouraging since the start of 2007.
DJ Euro Stoxx: 9.72%
DJ Euro Stoxx 50: 8.34%
Between January 1 2007 and May 25, 2007: Source Standard & Poor's
* Officially launched on June 1, Oddo Génération Euro, from January 1, used Oddo Europe (the so-called seed fund) as a support and has been managed since this date according to the processes and terms of Oddo Génération Euro.
Note: Past performances are no indication of future performances | |
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