Institutional Investor Review: Documenting the most prominent investment figures and events
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There is an Italian family - Agnelli, more than a hundred years of development history, inheritance of five generations, several ups and downs, since the creation of Fiat cars in 1899, and now the business empire covers automobiles, aviation, hotels, publishing, finance, football, luxury goods and many other fields.
The three major luxury car brands: Ferrari, Alfa Romeo and Maserati are all under the family name, including Serie A Juventus, Château Margaux in Bordeaux, Club Med, The Economist magazine, and reinsurance giant PartnerRe ($9 billion just sold) to this family.
This family was once known as the "Kennedy family of Italy", rich and invincible, in 123 years, with the assistance of two "regents", passed down to the fifth generation of "foreign surnames", and dozens of international brands were spread across the century-old planet.
Although there have been media reports that the Agnelli family is going to vigorously enter the luxury industry (in 2020, Exor invested in the designer Ms. Jiang Qiong'er and Hermès Group co-founded a global luxury lifestyle brand rooted in the Chinese tradition, "Shangxia", in the second quarter of 2021, 541 million euros to acquire a 24% stake in the French high-end footwear brand Christian Louboutin), after carefully studying the latest annual report, management structure and latest changes of the Exor Group, IIR prefers to believe that the fifth-generation successor, John, wants to turn the group into a multi-holding group, far more than just the luxury industry.
Although they are still capital operations, the fifth generation of John,around the former "Prince Regent" Marchionne, now, gathered a group of top shareholders and well-known PE successors (for example, one of KKR's successors, Joseph Y. BAE sits in the non-executive director, remuneration and nomination committee members, etc.), it is no wonder that in the past two years, the spin-off, investment, management choice and asset packaging and sale of the family property have become more smooth and ambitious.
One generation builds an industrial empire; the second generation lives short and participates in the acquisition of Juventus
123 years ago, Giovanni Agnelli, together with 8 entrepreneurs, founded Fiat, Fabbrica Italiana Automobili Torino ("Car Company of Turin"). As one of Fiat's founding shareholders, Giovanni was quickly elected as Fiat's executive director because of his outstanding talent. By 1906, Fiat had produced 1,149 cars, and Giovanni began to acquire shares from shareholders who had initially been almost equally divided.
By 1907, Fiat's 130HP sedan had reached a top speed of 160 km/h; in 1912, Fiat introduced its first small car, the Zero.
The outbreak of World War I (1914-1918) forced Fiat to begin serving the needs of the war, producing aircraft, machine guns, aero engines and other products. These products brought huge profits to Fiat and Giovanni, and in 1923 the Fiat Lingedo plant, built using Ford's production line, was completed, which was the largest automobile production plant in Europe at that time and became a symbol of Italian industry.
By 1929, Fiat had gone from being a regional car manufacturer to the third largest industrial group in Italy. Giovanni Agnelli was also awarded the highest honor of the Italian Parliament, Il Senatore.
Giovanni began diversifying and acquiring early on. In 1927, he founded the holding company, THEFI (Industrial Financial Institute), which brought together his stakes in Fiat and other industries. At that time, it already included food (Cinzano), consumer goods (Società Anonima Manifattura Pellami eCalzature), financial services (Sava), airlines (Società Aviolinee Italiane), industry (RIV, Vetrocoke, Società Idroelettrica). Piemontese-SIP) and real estate (Sestriere) and many other fields. And, at that time, he also acquired one of Italy's most prestigious daily newspapers, La Stampa.
Giovanni's son, Edoardo, was highly anticipated as the second-generation successor. On 24 July 1923, when the Fiat Lingodo factory was built, he participated in the completion of the Agnelli family's entry into the Juventus Club, but unfortunately, in 1935, the second generation of EdoArdo, who was in his early 40s, died unexpectedly in an air crash. The untimely death of a child was a huge blow, and a generation of Giovanni," also known as Gianni, the eldest son of Edo Aldo, who was only 14 years old at the time, was given the emphasis on Giovanni "Gianni" Agnelli (1921-2003).
The Juventus team began in 1897, in 1922, the Agnelli family, which had made great fortunes in the industrial field, entered the Juventus team by building the largest football stadium in the Apennines at that time, and the following year (1923), the Agnelli family officially joined the team that later created countless glories, with EdoArdo as the club president. In the following 12 years, Juventus won a total of 6 national championships and achieved a brilliant five-consecutive championship in serie A, creating a miracle of Italian football.
Joining juventus makes the Agnelli family the longest-running company/family in any sports sector in the world, and they are still the majority shareholder behind Juventus.
During World War II (1939-1945), Giovanni continued to accept a large number of military orders, which also made Giovanni the prince of Italian industry, and his status was in the ascendant, and Fiat also became an industrial giant in Italy and even Europe.
But after World War II, when the Allies liberated Italy, the new government accused Giovanni and his longtime minister, Fiat CEO Vittorio Valletta, of working with the fascist government to dissolve the board of directors and shut down Fiat, the family lost control for a time, and Gianni's grandfather died in late 1945.
The blow of World War II to the Agnelli family was exacerbated by the death of a generation of Giovanni. At the time, the third generation of Gianni was 25 years old. However, the new government finally learned that Fiat was an important enterprise in the recovery of the domestic economy, so it reassigned the position of CEO to Valletta, the 62-year-old minister of the Agnelli family.
As the "regent" of the family, he helped the family regain the management of Fiat, and also gave Gianni, who was passed down from generation to generation, more time to grow up.
Valletta ran the Fiat Group for 20 years, retiring from the presidency of the fiat board of directors at the age of 83 in 1966 (during his presidency, the main strategy was to develop small family cars, such as the Fiat 500 known as the Italian "people's car", the Fiat 600 revolution, etc., achieved fruitful results), and the successor was the third generation of the eldest son who pushed the entire family to the peak, known as the "unmarried king of Italy", Gianni.
The three generations of Gianni, the "soul of Turin", who like luxury cars, brought the family to the peak and also handed over to a foreign surname
Gianni loves luxury cars and luxury living, especially Ferrari. Inheriting his grandfather's business talents and boldness, he joined Valletta in post-war reconstruction and revived Fiat's automotive business, while also beginning to go international and consolidate the family's position in the automotive field.
In 1957, Gianni merged with a holding company and merged with the family-owned IFI company to form IFIL (Istituto Finanziario Italiano Laniero), which held the family's investments in the banking and publishing industries (which were later consolidated).
In 1964, IFINT (IFI International) was established, an important entity that holds family-owned overseas investments. In 1969, based on a long-term relationship, IFINT bought a 50% stake in Ferrari (and has since expanded its stake further) while keeping it operating independently. In 1973, IFINT was listed on the Luxembourg Stock Exchange and acquired a number of companies; at the turn of the century, IFINT was reorganized into the Exor Group.
Some of the key acquisitions/investments of IFNT in the Gianni era are:
In 1983 it acquired Toro Assicurazioni, one of Italy's largest insurance companies; around 1986, it acquired Alfa Romeo and the food industry company Birra Peroni; in 1991 it indirectly owned Chateau Margaux and some French properties in the Bordeaux appellation of France; in 1993 it acquired Maserati; and in 1995 it increased its capital to Club Méditerranée), New York icon Rockefeller Center, etc.
Gianni stepped on the political and business circles, and compared with his grandfather, qing was better than blue. There is a popular slogan among the workers of Turin, Italy: "Giovanni Agnelli (Gianni) is Fiat, Fiat is Turin, Turin is Italy." At its peak, the Fiat Group accounted for 4.4% of Italy's GDP, 3.1% of the industrial workforce and 16.5% of the total investment in industrial development.
However, although Gianni is commercially involved, he is also struggling to choose a successor. He and his wife Marela (daughter of the Prince of Naples) had only one son and one daughter, the family rule was that only a direct male could take over, and Gianni's son was shy, withdrawn, uninhibited, and addicted to mysticism. But what was even more unexpected was that it seemed to be cursed, and around 2000, the fourth generation of the Agnelli family, Gianni's nephew and son, died one after another.
In January 2003, the third generation of the head of the Gianni died (at the age of 82), turin, Italy, tens of thousands of people, industrial giants, politicians, football stars, workers, religious leaders formed thousands of teams to send him off. Both the President and prime minister of Italy also attended the funeral, presided over by Archbishop Of Turin.
Gianni's brother Umberto Agnelli also died of lung cancer shortly after taking over (at the age of 70). Finally, the Agnelli family's business was run by John Elkann, the eldest son of Gianni's daughter Margarita, and the Agnelli family ushered in the head of the family for the first time.
The five generations first had the "Prince Regent", followed by a group of financial and investment elites
Three generations of Gianni left a secret legacy when they died, and the Agnelli family also staged a scandal of mother-son confrontation and a hundred million inheritance (Gianni's daughter Margaret divorced john Elkan's father, remarried, and had children), and the 27-year-old John, who was responsible for the family's burden, was not senior enough to take on the family's surname, nor was he surnamed Agnelli, so he was not supported by all family members.
In addition, after 2000, the Demand for European Automobile Markets shrank, coupled with the stagnation of product renewal, and other factors, Fiat, which has a century-old history, suffered a large loss from 2000 to 2004. In just a few years, Fiat has replaced four CEOs, none of which can turn the tide.
Faced with the internal and external difficulties of the family and the group, in 2004, John boldly used Sergio Marchionne,who had been the CFO of several companies,2003 to serve as Fiat's CEO, and launched a radical reform of Fiat.
Less than two years after it took over, Fiat began to turn a profit, and even under the impact of the 2008 financial crisis, the group's profits reached $2.1 billion, becoming one of the few automakers in the world at that time to achieve annual profits. In addition, from 2009 to 2014, Marchionne presided over the integration of Fiat AG with Chrysler (the completion of the acquisition of all shares in the Chrysler Group, chrysler became a wholly owned subsidiary of Fiat), and Fiat Chrysler Automobiles (FCA) was announced, becoming the 7th largest automaker in the world and listed on the Milan and New York Stock Exchanges.
Soon after, the company announced the divestiture of Ferrari, and in October 2015, Ferrari completed its listing. At the beginning of the listing, Ferrari's market value was around $10 billion, and now that number has exceeded $50 billion. This has also become the most successful transaction in the more than 100 years of investment history of the Agnelli family, and the Exor Group is still Ferrari's largest shareholder.
Ferrari achieved a record year, with net income of €4.3 billion (+23.4%), and EBITDA reaching a record €1.5 billion, according to its 2021 annual report. Last year's order volume was the strongest ever, covering 2023, with all regions showing significant growth.
In 2011, the fifth-generation family leader, 35-year-old John, officially became ceo of exor group (now also chairman). Compared to Grandpa Gianni's love of luxury cars and a pan-"luxury" life, John seems to be more interested in breaking through the industry, increasing financial power, and establishing a new family-controlled diversified holding company between the Wallenberg family, LVMH Group and Berkshire Hathaway in Sweden:
Industrial divestiture and listing, holding mergers and acquisitions, deep participation in post-investment, grasping the mouthpiece media, setting up their own VC platform, etc.
For example, in 2015, John forcefully planned a rather "out-of-the-box" merger for the family group - the acquisition of US reinsurance company PartnerRe for $6.9 billion. This was the Agnelli family's largest single acquisition in more than a century (initially declined by management, plus there was already a buyer signing an agreement with PartnerRe at the time, exor completed the acquisition in March 2016), and John's original intention was to hedge the cyclical fluctuations of the automotive industry through the counter-cyclical nature of the financial business, and whenever the FCA needed a rescue, there was a "gold mine" to rely on (in December 2021, we signed a definitive agreement, Sale of PartnerRe to Covéa for a total cash consideration of $9 billion).
That same year, he also took over the Pearson Group's stake in the Economist Group, becoming the largest shareholder in a well-known British international media conglomerate founded in 1843 (most notably The Economist magazine).
Although there have been media reports that Exor is going to vigorously enter the luxury industry (in 2020, Exor invested in the global luxury lifestyle brand rooted in The Chinese tradition founded by designer Ms. Jiang Qiong'er and Hermès Group, "Shangxia", and in the second quarter of 2021, it acquired a 24% stake in French high-end footwear brand Christian Louboutin for 541 million euros), after carefully studying the latest annual report, management structure and latest changes of Exor Group, IIR prefers to believe that John wants to turn the group into a multi-holding group, far more than just the luxury industry.
On January 3, 2022, Iveco Group (Iveco Group, a spin-off of Exco's CNH Industrial commercial vehicles and special vehicles, powertrain and related financial services divisions), was listed on Euronext Milan, Italy; at the end of March this year, Exor announced the launch of the Italy SEEDS PROGRAM focusing on Italy, Exor Seeds (Exor's early venture capital arm) will invest €150,000 in pre-seed and seed-stage startups, offering Italian entrepreneurs a €150,000 investment; just this past April 22, Exor announced a €67 million acquisition of a 45% stake in "Lifenet Healthcare", an Italian company active in the healthcare sector, particularly in the management of hospitals and outpatient clinics.
According to Exor Group's 2021 annual report, as of the end of last year, the group's net assets were 31.069 billion euros; John also stepped down as CEO of Ferrari, who had a strong performance (Ferrari parachuted into Benedetto Vigna as CEO last June, he has no background in the luxury sector at all, and is an expert in the field of technology, having previously worked for a long time in the sensor business unit, the largest division of STMicrolectronics). At his last Ferrari leadership meeting, he shared with his colleagues the difficult moments of survival of the strategic path choices that Hermès experienced a century ago.
In this way, there is quite a "godfather" style. Today, John's Exor Group has shareholders such as the veteran British BG (Baillie Gifford), the American Vanguard Group, non-executive directors and members of the Compensation and Nomination Committee, and Joseph Y. BAE, one of KKR's latest successors.
Although the huge investment in the insurance industry is not outstanding for various reasons (although The performance and business of PartnerRe have increased, reinsurance companies are also facing huge losses during the new crown epidemic), and the auto industry has many challenges, it can be seen that John, whose surname is a generation of Giovanni's ambitions, can only wait and see.