Flash Note

Carmignac

Carmignac Portfolio Family Governed is celebrating its three-year anniversary

Invest in family run businesses with Carmignac Portfolio Family Governed.

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A bespoke approach to family business

Carmignac

Investing in family-owned companies presents a solid investment thesis as it aligns the owners’ and shareholders’ interests as they are themselves personally involved.

From a financial standpoint, we observe that family businesses outperform non-family businesses over time due to this ‘skin in the game’ effect. This leads to stronger motivation and commitment to the health of the business.

Carmignac Portfolio Family Governed relies on a dedicated analysis of family-owned companies. To do so, we have created our proprietary tool: the Carmignac Family 500 database, which screens for a universe of family companies using a rules-based approach. It is supplemented by a qualitative screen to confirm family cross holdings. Carmignac 500 benefits from a rich series of data from a long period of time. This 15-year history of family company returns allows us to identify relevant factors for family company performance. The specific point we look at within these companies is understanding the difference between control and ownership. We focus on founder or family control of the company. While ownership is an important consideration, we believe that the level of control is the most important to evaluate the family’s ‘skin in the game’.

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Why investing in family-owned companies?

  • 50%
    Outperformance

    In Europe, family-owned companies have outperformed non-family-owned companies on the stock market by +50% over the past 15 years.

  • 14%
    Higher profitability

    The financial profitability of family businesses reaches 14%, compared to 12% for other companies.

  • 3x
    Companies with less debt

    They have a level of debt 3x lower than the others.

Source: Proprietary database « Carmignac Family 500 »



A responsible approach consistent with our long-term view
Carmignac Portfolio Family Governed illustrates our commitment and experience to a responsible investment approach. Our unique approach enables us to focus on companies demonstrating strong Governance.

We strive to identify firms generating positive change based on the Sustainable Development Goals (SDGs) defined by the United Nations. At Carmignac, we identify nine SDGs as ‘investable’, which means that companies in which our funds can invest are able to support progress towards these goals through their products and services. In this sense, Carmignac Portfolio Family Governed has a sustainable objective of investing more than 50% of the fund’s AUM in companies with over 50% of their revenues derived from goods and services positively aligned with at least one of the nine ‘investable’ SDGs by Carmignac: (1) No Poverty; (2) No Hunger; (3) Good Health and Well Being; (4) Quality Education; (6) Clean Water; (7) Affordable and Clean Energy; (9) Industry, Innovation and Infrastructure; (11) Sustainable Cities and Communities; and (12) Responsible Consumption and Production.

Invest in family run businesses

Carmignac Portfolio Family Governed is focusing on family companies as, at Carmignac, we share common values: human-driven insight, entrepreneurial spirit and active commitment.

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A thematic Fund reflecting our values

Carmignac

We are focusing on family companies as, at Carmignac, we share common values: human-driven insight, entrepreneurial spirit and active commitment. Being a family business ourselves, this puts us in the best position to understand and anticipate the strategy of the companies’ management.

Carmignac benefits from a strong history, and 30 years of investment experience has taught us vigilance. As Governance is a key dimension of family businesses, our dedicated governance analyst is a strong asset for pre-investment deep-dives and governance-related investment recommendations, but also to monitor portfolio holdings.

In our effort to have a positive impact regarding Governance, active ownership is also very important at Carmignac. Our engagement policy helps to identify areas of improvement to the Governance analyst who engages directly with the company to seek to effect change.

Why family companies matters?

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Carmignac Portfolio Family Governed A EUR Acc

ISIN: LU1966630706

Recommended minimum investment horizon

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Main risks of the Fund

EQUITY: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.

CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.

DISCRETIONARY MANAGEMENT: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the stocks selected.

The Fund presents a risk of loss of capital.

* Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time.

Latest insights

This is a marketing communication. Please refer to the KIID/prospectus of the fund before making any final investment decisions. This material may not be reproduced, in whole or in part, without prior authorisation from the Management Company. This material does not constitute a subscription offer, nor does it constitute investment advice. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. This material has been provided to you for informational purposes only and may not be relied upon by you in evaluating the merits of investing in any securities or interests referred to herein or for any other purposes. The information contained in this material may be partial information and may be modified without prior notice. They are expressed as of the date of writing and are derived from proprietary and non-proprietary sources deemed by Carmignac to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Carmignac, its officers, employees or agents. The recommended investment horizon is a minimum and not a recommendation to sell at the end of that period. Access to the Funds may be subject to restrictions regarding certain persons or countries. This material is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the material or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must not access this material. Taxation depends on the situation of the individual. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and FATCA. Company. The risks, fees and ongoing charges are described in the KIID (Key Investor Information Material). The KIID must be made available to the subscriber prior to subscription. The subscriber must read the KIID. Investors may lose some or all their capital, as the capital in the funds are not guaranteed. The Funds present a risk of loss of capital. The Funds’ prospectus, KIIDs, NAV and annual reports are available at www.carmignac.com, or upon request to the Management. Investors have access to a summary of their rights in French, English, German, Dutch, Spanish, Italian at section 6 of "regulatory information page" on the following link :https://www.carmignac.com/en_US Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The Management Company can cease promotion in your country anytime. UK:This document was prepared by Carmignac Gestion and/or Carmignac Gestion Luxembourg and is being distributed in the UK by Carmignac Gestion Luxembourg UK Branch (Registered in England and Wales with number FC031103, CSSF agreement of 10/06/2013). In Switzerland: the prospectus, KIIDs and annual report are available at www.carmignac.ch, or through our representative in Switzerland, CACEIS (Switzerland), S.A., Route de Signy 35, CH-1260 Nyon. The paying agent is CACEIS Bank, Paris, succursale de Nyon/Suisse, Route de Signy 35, 1260 Nyon. Copyright: The data published in this presentation are the exclusive property of their owners, as mentioned on each page. CARMIGNAC GESTION 24, place Vendôme - F-75001 Paris - Tél : (+33) 01 42 86 53 35 Investment management company approved by the AMF Public limited company with share capital of € 15,000,000 - RCS Paris B 349 501 676 CARMIGNAC GESTION Luxembourg - City Link - 7, rue de la Chapelle - L-1325 Luxembourg - Tel : (+352) 46 70 60 1 Subsidiary of Carmignac Gestion - Investment fund management company approved by the CSSF Public limited company with share capital of € 23,000,000 - RC Luxembourg B 67 549