Exor: Fiat Crisis to Ferrari Glory - [Business Breakdowns, EP.229]

This is Business Breakdowns. Business Breakdowns is a series of conversations with investors and operators diving deep into a single business. For each business, we explore its history, its business model, its competitive advantages, and what makes it tick. We believe every business has lessons and secrets that investors and operators can learn from, and we are here to bring them to you. To find more episodes of breakdowns, check out joincolossus.com. All opinions expressed by hosts and podcast guests are solely their own opinions. Hosts, podcast guests, their employers, or affiliates may maintain positions in the securities discussed in this podcast. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. I'm Zach Fuss. And today, we are breaking down Exor. The origins of Exor date back to the end of the nineteenth century when Giovanni Agnelli founded the auto company Fiat. In 1923, Exor acquired the Juventus Football Club, which it still owns today. But over the company's 100 year old history, a lot has changed. While some of the core assets remain the same, today, Exor serves as an investment holding company. Its largest and most notable assets are Ferrari, CNH, Stellantis, Phillips, and a number of other notable private companies. Additionally, they've shifted focus to bulking up their alternative asset management business, Sangato. Like many holding companies, XOR trades at a material discount to what the sum of its parts suggests. But management has been steadfastly working to close this discount by selling assets, reallocating capital, and repurchasing shares. Today, Exor is led by John Elkan, the grandson of the late Giovanni Agnelli, the founder of the Exor empire. Elkan was named heir of his grandfather at the age of 21 and has fostered and reshaped the business to what it is today. To break down Exor, I am joined by Krishna Mohanaj, a portfolio manager of the international strategy at Diamond Hill. We hope you enjoy this breakdown of XOR. Alright. Krishna, thanks for joining us once again this time to break down XOR, a business that has a storied history. Our listeners probably know a little bit about a lot of the parts of Exor, but I think bringing it all together today in this conversation to highlight the history of the business and what is in this family holding company will be really interesting. So just to kick things off, what is Exor? Zach, thank you. It's great to be back. Thanks for having me again. Exor is a fascinating business to talk about. It is a Dutch holding company controlled by the Agnelli family. Giovanni Agnelli was the founder of Fiat in the late eighteenth century, and their family wealth is managed through this holding company. It's a fascinating story for a couple of reasons. First, you've got the history. As you mentioned, Xor is a Dutch company on paper, but in its bones, it's all Italian. It's really the history of Fiat, …