Since Cooper Investors’ founding in 2001, our clients have been the beneficiaries of the investment teams identifying and owning several of the best family-owned and founder-led businesses in Australia and across the globe. Portfolio Manager Allan Goldstein’s specific success identifying this cohort was the genesis of the firm launching the Cooper Investors Family and Founder Fund in 2019, which has delivered 11.8% (Gross) and 10.49% (Net) annualised returns.¹

The fund has a singular focus, to own a concentrated global portfolio of listed equities (20-30) that meet our guidelines of founder led, family linked, or employee-owned companies. The fund predominantly invests in companies with less than <$100bn market cap as it seeks to back and invest in the great next generation family and founder businesses.
The unique traits of family and founder-led businesses we seek are:

  • Monetary skin and soul in the game (Our fund average is 25% insider ownership, more than four times the average of the ASX200).
    These companies share a significant proportion of shares controlled by people within the company itself, where there is alignment for continued success and growth. We believe that this also leads to greater ‘soul’ in the game, where there is a deeper connection and dedication to the business, acting as stewards for its long-term growth and legacy.
  • Genuine long-term thinkers and intelligent capital allocators. We look for companies with a combination of operational excellence, capital deployment, a focus on customer satisfaction and a commitment to getting better (not just bigger).

Several studies (UBS, McKinsey, Credit Suisse) have found that investing behind these traits has led to long-term outperformance with lower risk.¹ Our attraction to this cohort is the risk/reward mindset these companies have. The entrepreneurial streak combined with a capital preservation attitude that supports long term compounding.

Cooper Investors Family and Founder Fund: Average Insider Ownership

Average Insider Ownership Comparison

As long-term observational investors, Cooper Investors utilises vast networks to get inside and around these companies to fully understand the opportunities and risks. We average around 1,000 company visits per year, investing in our networks to uncover underappreciated quality and value. Many of these companies are not covered extensively by research analysts (if at all), providing further opportunity for value creation.

Our raison d’etre is finding the holy trinity of value latency, supportive operating trends, and focused management teams. These networks and relationships help us understand what is happening at the coal face of industry and company operations.

Both Allan Goldstein, Portfolio Manager and John Mitchelhill (Research Analyst) see attractive investment opportunities in their focus area and expect EPS growth of 12% plus dividends for our portfolio over the coming year.2 Furthermore, the volatile and uncertain backdrop suggests it’s a prudent time to seek leaders with aligned motives and long-term ambitions. History tells us these proprietorial businesses not only weather the storms but emerge from them stronger than before.

We believe great businesses aren’t built in quarters—but over decades.

At a Glance – Family and Founder Fund:

Danaher Corporation
US-based Danaher Corporation was the inspiration for establishing the Family and Founder Fund, where Peter Cooper and Allan Goldstein were on a research trip for the CI Global Equities Fund, with Danaher a stock held in the Global Equities Fund in 2010. The conversation started following a factory visit to one of Danaher’s operations in the outer suburbs of Illinois in 2014. The visit highlighted the business quality, management capabilities and value latency for shareholders. The Danaher business system was real. The conviction levels in the stock were high and the idea of a dedicated portfolio of only these rare, listed, founder and family businesses first took hold.

You can read a case study about Family and Founder portfolio company in Danaher: The Art of Compounding.

¹ Past performance is not a reliable indicator of future performance.

2 Please note that this is a forecast only, based upon Cooper Investors’ current views and assumptions, and is not guaranteed to occur. Any value latency forecast may differ materially from the results ultimately achieved.