Go, Global go !
“Buy extraordinary companies at ordinary prices”, is an attractive target repeated each year in the annual report published by Berkshire Hathaway, the holding company belonging to world-renowned investor Warren Buffett.
This wise old man (80 this year) is a constant source of inspiration and his investment in China as of 2003 prompted us to step our reflection beyond our own borders. We made haste slowly and in 2004 our first steps outside France were made with the launch of Echiquier Agenor, the fund specialised in European midcaps, followed a year later by Echiquier Major which is focused on key European large caps. These funds have performed more than respectably and now boast attractive rankings in their universe. A special mention goes to Echiquier Major, which celebrates its fifth anniversary this year and has managed to beat more than 97% of the 885 funds in its category on a one-year, three-year and five-year performance basis. Improving our grasp of Shakespeare’s language has clearly paid off.
What has also clearly paid off is the extension of our reflection and investment methods following the success of Agressor in France. This opening towards new geographical horizons, higher stockmarket capitalisations and high-growth company models guarantees the lasting quality of management of the increasing amount of capital investors entrust to us. We owe it to you to be capable of building an all-weather performance in both neglected companies, particularly favoured by Agressor, and in highly visible stocks (LINDT, ATLAS COPCO) so dear to Echiquier Major.
However, after meeting so many extraordinary companies (whether those that equip distant mines or transform cocoa into luxury chocolate) and after analysing so often their market share in regions often well beyond Europe, it seemed clear to us that a step further was necessary and that we should extend our research to leaders with no geographical restrictions.
As such, for the past two years already, accompanied by strategy consultancy, Estin, we have been inquiring into and questioning the growth strategy of global leaders listed in New-York, London and Shanghai.
Why invest so much time and money in identifying candidates who seem as obvious as COLGATE in the US or BAIDU in China? Because being a leader in a market today does not mean a group will still be one tomorrow. We are constantly projecting and would like to focus our research on groups who have managed to develop their geographical mix in order to enjoy sales growth of more than 7% over time. As such, while we have included COLGATE, which sells one toothpaste in three in China, we have not selected L’OREAL in our super leader research despite it being the clear leader in Europe.
Being a leader today is irrelevant and the important factor is to still be a leader tomorrow and to avoid falling into a strategic gap!
This expression in the world of strategy consulting has become a benchmark for the team in order to assess and choose companies capable of avoiding this gap, or not. A key criteria which resumes our fundamental work on the strategy of major groups whose market capitalisations often exceed $50bn (GOOGLE, which is in our selection, is worth more than $150bn). An excellent job on investigation and reflection, which has already helped us identify more than 130 global leaders and select 40 candidates for investing your savings.
This was enough to launch Echiquier Global, a fund of super leaders, which we hope will enjoy a long life and healthy stockmarket performances. The first units go on sale on 16 April.
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