Elkann: Exor will focus on large investments

Exor, the Italy-based holding company controlled by the Agnelli family, is to focus on its large investments, rather than seek smaller assets.

In a letter to shareholders, family member and Exor chairman John Elkann said: “We want to reduce the number of small investments in order to concentrate on a few larger ones.”

The company currently has large shares in Fiat (30.47%), the automaker founded by investors including Giovanni Agnelli in the late 19th century, Fiat Industrial (30.45%), testing business SGS (15%) and commercial real estate services company Cushman & Wakefield (69.5%). It also has smaller holdings in a number of companies including television producer Banijay Group and paper maker Sequana.

However, Elkann added Exor may “contemplate investing smaller amounts” if there is a chance to get a “minority stake in a good business at attractive valuations” or in a business venture that is small, but has the “potential to grow to be a larger company”.

At the end of last year, Exor’s net financial position was negative by €326 million, the letter said, “entirely attributable to the allocation of capital to new investments”.

The company's net asset value fell by 24.4% in 2011, compared to a fall of 4.5% for the MSCI World Index, which tracks stocks across the world.

"Despite our negative 2011 NAV performance, we strongly believe that the quality of the companies we own and the ability of their leaders will allow Exor's NAV to continue to outperform the MSCI World Index over the long term," said Elkann, who is also chairman of Fiat and sits on the board of Fiat Industrial, following the split of the Fiat Group in 2011.

This year has seen a “renewal of positive sentiment” in world markets, but Elkann added: “While such a positive development is welcome, I consider it appropriate to remain cautious, particularly while consumption data, especially in the EU, remains weak.

“What we can say confidently about 2012 is that it will be a year of continuous simplification for our organisation and our investments. I am convinced: for us, simpler is better.”