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jerryking : discretion   7

An unusual family approach to investing
May 30, 2018 | FT | John Gapper.

JAB’s acquisition of Pret A Manger resembles private equity but with a long-term twist.

Warren Buffett’s definition of Berkshire Hathaway’s ideal investment holding period as forever. ....Luxembourg-based JAB, owned by four heirs to a German chemical fortune, takes a family approach to investing. It is unusual in that this holding company seeks to retain its portfolio companies for at least a decade. These include Panera Bread, Krispy Kreme and Keurig Green Mountain coffee, which it merged with Dr Pepper Snapple in an $18.7bn deal in January 2018. This week JAB acquired the UK sandwich chain Pret A Manger for £1.5bn, continuing its buying spree of cafés and coffee, mounting a challenge to public companies such as Nestlé.

**These companies are acquired not to be traded but to be invested in and expanded.**

JAB is an innovative combination of ownership and investment in a world that needs challengers to stock market ownership and private equity. It is family controlled, but run by veteran professional executives. When it invests in companies such as Pret A Manger, it deploys not only the Reimann family’s wealth but that of other entrepreneurs and family investors.......Some of the equity for its recent deals, including Panera and Dr Pepper, came from funds raised by Byron Trott, the former Goldman Sachs investment banker best known for being trusted by the banker-averse Mr Buffett. Mr Trott’s BDT banking boutique specialises in advising founders and heirs to corporate fortunes, including the Waltons of Walmart, and the Mars and Pritzker families.

This is investment, but not as most of us know it. By definition, the world’s companies are mostly controlled by founders and their families — only a minority become big enough to be floated on stock markets and need to disclose much of their workings to outsiders. Family fortunes also tend to remain as private as possible: there is little incentive to advertise how much wealth one has inherited......As [families'] fortunes grow in size and sophistication, more of the cash is invested in other companies rather than in shares and bonds. That is where JAB and Mr Trott come in.

Entrepreneurs and their families tend to be fascinated by their own enterprises and bored by managing their wealth. But they want to preserve it, and they often like the idea of investing it in companies similar to their own — industrial and consumer groups that need more capital to expand. It is not only more interesting but a form of self-affirmation for the successful....Being acquired by JAB is appealing. The group turns up, says it will not take part in an auction but offers a good price (it bought Pret for more than its former owner Bridgepoint could get by floating it). It often keeps the existing executives, telling them they have to plough their own money into the company, and invests in long-term growth provided the business is efficiently run.

This is more congenial than heading a public company and contending with a huge variety of shareholders, including short-term and activist investors. It is also less risky than being bought by 3G Capital, the cost-cutting private equity group with which Mr Buffett teamed up to acquire Kraft Heinz. While 3G is expert at eliminating expenses it is less so at encouraging growth.
coffee  dynasties  high_net_worth  holding_periods  investing  investors  JAB  long-term  Nestlé  Pritzker  private_equity  privately_held_companies  Unilever  unusual  Warren_Buffett  family  cafés  Pret_A_Manger  3G_Capital  discretion  entrepreneur  boring  family_business  heirs 
may 2018 by jerryking
6 Ways Pretend Investors Differ From the Real Ones
NOV. 21, 2016 | The New York Times | By CARL RICHARDS.

* Have a long term plan
* Don't react to every single event that happens in the short term. Financial pornography is not 'actionable information' on which to make a decision about.
* Make changes to my investments based on what happens in my own life. If my goals change or there is a fundamental change in my financial situation, then I should consider an alteration.
* Real investors know that it takes a long time for a tree to grow, and it will not help to dig it up to see if the roots are still there. The same rule applies to investments. And because watching things get big slowly is not very exciting, real investors tend not to talk about that tree all that much.
* Real investors understand the difference between the global economy and their personal economy (aka micro economy) and choose to focus on the latter.
* Focus on the things I can control, like saving a bit more next year, keeping my investment costs low, not paying fees unless it’s necessary and managing my behavior by not buying high and selling again when prices are low.
howto  investors  advice  personal_finance  beyond_one's_control  habits  microeconomics  personal_economy  actionable_information  long-term  span_of_control  financial_pornography  patience  noise  discretion  global_economy 
november 2016 by jerryking
Henninger: The Age of Indiscretion - WSJ.com
April 25, 2012, 6:48 p.m. ET

The Age of Indiscretion
GSA partiers in Vegas and Secret Service revelers in Cartagena make it clear that discretion is dead.

By DANIEL HENNINGER
Daniel_Henninger  scandals  discretion  humility  etiquette  public_decorum  popular_culture  personal_responsibility 
april 2012 by jerryking
Killing Gossip With Kindness - WSJ.com
JANUARY 6, 2010 | Wall Street Journal | By JEFFREY ZASLOW.
Before saying something to or about someone else, ask yourself: "Is it
kind? Is it true? Is it necessary?" These three questions have been
around for centuries, attributed to Socrates and Buddhist teachings, and
linked to the tenets of Christianity and the Jewish prohibition on
"lashon hara," or evil language. Replace words that hurt with words
that encourage, engage and enrich."
etiquette  Jeffrey_Zaslow  discretion  scuttlebutt  Socrates  public_decorum  gossip  think_threes  grace 
january 2010 by jerryking
Blackstone probably just the tip of China's private equity iceberg
01/06/07 | From Friday's Globe and Mail| ERIC REGULY

China, the oil-rich Arab countries and Russia will use private equity
investments and partnerships to buy everything from oil sands and tech
companies in Canada to manufacturing and financial services in Europe.
Maybe those investments are being made right now, or have been made. We
don’t know. Private equity does not have loose lips. Secrecy is their
currency.
private_equity  Eric_Reguly  China  opacity  Blackstone  secrecy  discretion 
march 2009 by jerryking

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