Continental Europe Family Leaders: a long term vision

Continental Europe Family Leaders: a long term vision

Family-owned companies have shown historical outperformance within the broader equity universe.1 We believe family companies hold several competitive advantages, embedded in their long-term vision and sustainability mindset. These companies could offer higher economic value creation and tend to focus on organic growth through exposure to attractive structural trends.

LO Funds – Continental Europe Family Leaders seeks to capture these opportunities through a high conviction portfolio of what we consider high quality, family-owned small caps in Continental Europe.

 

sub-fund details:

LO Funds - Continental Europe Family Leaders

 

Family businesses: a long-term vision of success.2

 

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Long-term perspective
Spurred by a commitment to pass the baton to the next generation, family businesses look to the long-term.
Economic value creation
Family businesses have “skin in the game”. They tend to focus on organic growth and long-term value creation instead of quarterly reporting.
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Leaders in attractive trends
Achieving intra-generational wealth transfer requires them to be more attuned to looming structural shifts and growth opportunities.
The right mindset for the sustainability revolution 
Family companies have a larger reputation at stake and stakeholder alignment to uphold – a natural incentive to pursue a sustainable business model.

 

why invest?

LO Funds – Continental Europe Family Leaders is a high conviction strategy focusing on high-quality, family-owned small caps in Continental Europe.

As a multi-generational family business
ourselves since 1796, we share a common philosophy and understand a family firm’s values and mindset.

 

The long-term potential of family businesses

Family businesses and entrepreneurs make up a sizable proportion of our economies.

These businesses are more likely to prioritise passing down wealth to the next generation, which can translate into a more stable, long-term vision than that of other companies.

They are associated with higher economic value creation, driven by a ‘skin-in-the-game’ mentality.

These businesses tend to operate on a long-term-strategy focused on navigating powerful mega-trends and challenges.

Finally, they have a stakeholder alignment to uphold. The pursuit of trans-generational value creation puts stewardship for future stakeholders in focus, which is central to our understanding of what is required in the sustainability revolution.

 

Building a portfolio of family leaders

Benchmark: MSCI Europe ex-UK Small Cap

Holdings: a low-turnover, high-conviction portfolio of 40 to 65 companies with growth, quality, resilience and solid “familiness” characteristics

Median market cap: <EUR 2bn

Maximum size per holding: 5%
 

A portfolio that may directly benefit from sustainable themes: three examples

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Sustainable food

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Sustainable urban systems

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Sustainable supply chain

Cork is naturally renewable and low-impact to grow. Under the majority ownership of a family, a Portuguese cork manufacturer has leapt forward to a leadership position through differentiation and innovation.  For instance, its technical cork stoppers gained market share as a substitute to plastic stoppers. 

Even amid the Covid-19 crisis, the green building market worldwide is expected to grow by $187bn over the next 7 years3. The European leader in this niche market is a founder-managed business that focuses on ecological building materials derived from wood. The company has found success through a strategy of vertical integration.

Industrial robotics and the widespread adoption of automation is shaping our future. Machine vision solutions, both hardware and software, help improve efficiencies. In other words, they are the “smart eye” of robots. The founder of one of the top three producers of these technologies continues to act as chairman of the board and encourages its innovative growth mindset.

 

investment team.

LOcom_AuthorsAM-Dahmani.png Malek Dahmani
Lead Portfolio Manager, Geneva
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Xavier Lagrandie
Portfolio Manager, Geneva

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Michel Leblanc
Portfolio Manager, Geneva

Source: LOIM as at August 2020. The investment management team is subject to change without notice..

 

investment philosophy.

At Lombard Odier Investment Managers, we believe sustainability will drive future return
potential4.

A strong and clear philosophy

At Lombard Odier Investment Managers, our conviction in sustainability is integrated into our processes, driving everything we do.

Our approach to implementation is rigorous and disciplined thanks to a transversal platform across strategies. This ensures maximum efficiency.

Our fundamental research is highly-focused and benefits from sharing of best-practices and ideas.

Our disciplined approach facilitates strict risk management by ensuring transparency and accountability at every step of the process.
 

sub-fund details:

LO Funds - Continental Europe Family Leaders

sources.

1 Source: LOIM. Family leaders universe compared to MSCI Europe ex-UK small caps, 31.12.2007 - 31.12.2019. Past performance of a benchmark is not a guarantee of future results. No benchmark is directly comparable to the Sub-Fund. There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred.
2 Source: LOIM. For illustrative purposes only.
3 Source:  https://www.environmentalleader.com/2020/06/even-with-covid-19-green-buildings-materials-market-expected-to-grow-by-187-billion/
There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred. For more information on the LOIM ESG process please refer to the following link: https://am.lombardodier.com/home/the-sustainability-revolution-wi.html.

Information importante.

Lombard Odier Funds (hereinafter the “Fund”) is a Luxembourg investment company with variable capital (SICAV). The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as an Undertaking for Collective Investments in Transferable Securities UCITS under Part I of the Luxembourg law of the 17 December 2010 implementing the European directive 2009/65/EC, as amended (“UCITS Directive”). This marketing document relates to Continental Europe Family Leaders, a Sub-Fund of Lombard Odier Funds (hereinafter the “Sub-Fund”). The Management Company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxem-bourg, Grand Duchy of Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds ("AIFs") and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services.
This marketing communication was prepared by Lombard Odier Asset Management (Europe) Limited. The prospectus, the articles of incorporation, the Key Investor Information Documents, the subscription form and the most recent annual and semi-annual reports are the only official offering documents of the Sub-Fund’s shares (the “Offering Documents”). The Offering Documents are available in English, French, German and Italian at www.loim.com and can be requested free of charge at the registered office of the Sub-Fund in Luxembourg: 291 route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg. The information contained in this marketing communication does not take into account any individual’s specific circumstances, objectives or needs and does not constitute research or that any investment strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes a personal investment advice to any investor. This marketing communication is not intended to substitute any professional advice on investment in financial products. Before making an investment in the Sub-Fund, an investor should read the entire Offering Documents, and in particular the risk factors pertaining to an investment in the Sub-Fund. We would like to draw the investor’s attention toward the long-term nature of delivering returns across the economic cycle and the use of financial derivative instruments as part of the investment strategy may result in a higher level of leverage and increase the overall risk exposure of the Sub-Fund and the volatility of its Net Asset Value. Investors should take care to assess the suitability of such investment to his/her particular risk profile and circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital. Past performance is not a reliable indicator of future results. Where the Sub-Fund is denominated in a currency other than an investor’s base currency, changes in the rate of exchange may have an adverse effect on price and income. Please take note of the risk factors. Any benchmarks/indices cited herein are provided for information purposes only. No benchmark/ index is directly comparable to the investment objectives, strategy or universe of a Sub-Fund. The performance of a benchmark shall not be indicative of past or future performance of any Sub-Fund. It should not be assumed that the relevant Sub-Fund will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between such Sub-Fund’s returns and any index returns. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/ risk.
MSCI information may only be used for internal purposes, may not be reproduced or disseminated in any form whatsoever and may not be used as the basis or constituent element of any financial instruments, products or indices. MSCI information should not be construed as investment advice or recommendations to you to make (or refrain from making) any investment decision and cannot, as such, be considered reliable. Historical data and analyses should not be considered as any indication or guarantee in any analysis, forecast or prediction of future performance. MSCI information is provided “as is” and the user of this information assumes full responsibility for the use that is made of this information. MSCI, each of its affiliates and others involved in or concerned with the compilation, calculation or creation of MSCI information (collectively the “MSCI Parties”) expressly disclaim all warranties (including, without limitation, all warranties of originality, accuracy, completeness, timeliness, non-infringement, market value and fitness for a specific purpose) with respect to such information. Without limiting the foregoing, in no event shall the MSCI Parties be liable for any direct, indirect, specific, incidental, punitive, consequential (including, without limitation, lost profits) or other damages. (www.msci.com).
The information and analysis contained herein are based on sources considered to be reliable. Lombard Odier makes its best efforts to ensure the timeliness, accuracy, and completeness of the information contained in this marketing communication. Nevertheless, all information and opinions as well as the prices, market valuations and calculations indicated herein may change without notice. Source of the figures: Unless otherwise stated, figures are prepared by Lombard Odier Asset Management (Europe) Limited. The tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Lombard Odier does not provide tax advice and it is up to each investor to consult with its own tax advisors.
NOTICE TO RESIDENTS IN THE FOLLOWING COUNTRIES: 
Austria – Paying agent: Erste Bank der österreichischen Sparkassen AG. 
Belgium – Financial services provider: CACEIS Belgium S.A. The Sub-Fund is not appropriate for Belgian retail investors unless the investment subscription is more than EUR 250,000. Please contact your tax advisor to identify the iBelgian tax “TOB” (“Taxe sur les Operations Boursières”) on your transactions, as well as the impacts of the withholding tax (“Précomptes mobiliers”). Lombard Odier has an internal Complaints Management Service. You can lodge a claim via your Relationship Manager or directly to Lombard Odier (Europe) S.A. Luxembourg, Belgium Branch, Claim Management Service, Avenue Louise 81, Box 12, 1050 Brussels, Fax: (+32) 2 543 08. Alternatively you can address your complaint free of charge to the national complaint service in Belgium, OMBUDSMAN: North Gate II, Boulevard du Roi Albert II, n°8 Boîte 2 2, 1000 Brussels, Tel : (+32) 2 545 77 70, Fax : (+32) 2 545 77 79, Email: Ombudsman@Ombusfin.be. 
France – Centralising agent: CACEIS Bank. 
Germany – German Information and Paying agent: DekaBank Deutsche Girozentrale. Italy – Paying agents: Société Générale Securities Services S.p.A., State Street Bank International GmbH – Succursale Italia, Banca Sella Holding S.p.A., Allfunds Bank S.A.U., Milan Branch, BNP Paribas Securities Services, CACEIS Bank, Italy Branch. Liechtenstein – Paying agent: LGT Bank AG. Luxembourg – Depositary, central administration agent, registrar, transfer Agent, paying agent and listing agent: CACEIS Bank, Luxembourg Branch. 
Netherlands – Paying agent: Lombard Odier Funds (Europe) S.A. – Dutch Branch. 
Spain – Paying agent: Allfunds Bank S.A.U. – CNMV Number: 498. 
Sweden – Paying agent: Skandinaviska Enskilda Banken AB (publ). 
Switzerland – The Sub-Fund is registered with the Swiss Federal Financial Market Supervisory Authority (FINMA). The Offering Documents together with the other Shareholders’ information are available free of charge at the Swiss Representative: Lombard Odier Asset Management (Switzerland) S.A., 6, avenue des Morgines, 1213 Petit-Lancy, Switzerland. Swiss Paying Agent: Banque Lombard Odier & Co Ltd. 11, rue de la Corraterie 1204 Genève, Switzerland. Publications about the Sub-Fund: www.fundinfo.com. The issue and redemption prices and / or the net asset value (with the mention “excluding commissions”) of the Share classes distributed in Switzerland: www.swissfunddata.ch and www.fundinfo.com. Bank Lombard Odier & Co Ltd is a bank and securities dealer authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA). 
United Kingdom – This document is a financial promotion and has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000, by Lombard Odier Asset Management (Europe) Limited. It is approved for distribution by Lombard Odier (Europe) S.A., London Branch for Retail Clients in the United Kingdom. The Sub-Fund is a Recognised scheme in the United Kingdom under the Financial Services and Markets Act 2000. UK regulation for the protection of retail clients in the UK and the compensation available under the UK Financial Services Compensation scheme does not apply in respect of any investment or services provided by an overseas person. UK facilities agent: Lombard Odier Asset Management (Europe) Limited. Lombard Odier (Europe) S.A. UK Branch is a credit institution regulated in the UK by the Prudential Regulation Authority (PRA) and subject to limited regulation by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Details of the extent of our authorisation and regulation by the PRA and regulation by the FCA are available from us on request. 
European Union Members: This marketing communication has been approved for issue by Lombard Odier (Europe) S.A. The entity is a credit institution authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. Lombard Odier (Europe) S.A. branches are operating in the following territories: Belgium: Supervisory Authority: Autorité des services et marches financiers (FSMA), Representative: CACEIS Belgium S.A.,Avenue du Port 86C, b320, 1000 Brussels; France: Lombard Odier (Europe). S.A. Succursale en France, a credit institution under limited supervision in France by the Autorité de contrôle prudentiel et de résolution (ACPR) and by the Autorité des marchés financi-ers(AMF) in respect of its investment services activities; Italy: Lombard Odier (Europe) S.A. Succursale in Italia, enrolled in the Milan Companies Register No. 09514880963, R.E.A. No. MI – 2095300 Regulated in Italy by the Commissione Nazionale per la Società e la Borsa (CONSOB) and la Banca d’Italia; Spain: Lom-bard Odier (Europe) S.A. Sucursal en España, Lombard Odier Gestión (España) S.G.I.I.C., S.A.U., credit institutions under limited supervision in Spain by the Banco de España and the Comisión Nacional del Mercado de Valores (CNMV). 
United States: The Fund and Sub-Fund is not registered under the “Securities Act of 1933” as amended and therefore, cannot be sold, offered or distributed to any “U.S, Person” as defined under “Regulation S”. Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States or given to any US person. This marketing communication may not be reproduced (in whole or in part), transmitted, modified, or used for any public or commercial purpose without the prior written permission of Lombard Odier. 
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