In my search for attractive long-term opportunities, I have always been fascinated by holding companies….businesses with the primary aim of investing in the stock of publicly traded enterprises but also in unlisted enterprises from time to time.
The argument for investment in such holding companies is that they are staffed by highly qualified and intelligent people with the sole aim of finding businesses that offer good value over the long-term (performance of the holding company’s publicly traded stock over time would eventually be the judge of this thesis).
Return from an investment in the stock of a publicly traded holding company is not much different from an investment in the stock of any other publicly traded enterprise; dividends and price appreciation (in the case of a holding company, investors are hoping for the spread between the company’s NAV per share and its market price per share to narrow).
While I am sure there are numerous holding companies listed throughout the world, I find Belgium’s Groupe Bruxelles Lambert (GBL), Sweden’s INVESTOR AB, and Italy’s EXOR to be quite interesting and worthy of a deeper look.
What do you think…do you have any holding company investments or are considering initiating a position in any?