There is a relatively unknown man in Switzerland who invests capital in a particular way that makes almost any investor who learns about it jealous.
Time for a thread 👇🏽👇🏽
Time for a thread 👇🏽👇🏽
1/ Anthony (Tony) Deden is the Chairman of Edelweiss Holdings.
He started out managing a single family's assets in the mid-1980s. That eventually turned into a second, a third, and a fourth family.
Eventually he launched a fund in 2002 under the Edelweiss name.
He started out managing a single family's assets in the mid-1980s. That eventually turned into a second, a third, and a fourth family.
Eventually he launched a fund in 2002 under the Edelweiss name.
2/ Tony Deden launched the fund after an epiphany — he wanted out of the traditional money management game.
It was too short-term focused and he felt like the incentives weren't aligned.
Everyone was chasing the popular strategies, not necessarily the right one.
It was too short-term focused and he felt like the incentives weren't aligned.
Everyone was chasing the popular strategies, not necessarily the right one.
3/ Tony Deden was uninterested in annual returns, nor did he want to chase the latest stock that was rumored to be next to appreciate in price.
Deden wanted to take the owner's mindset of an entrepreneur and apply it to managing capital.
Deden wanted to take the owner's mindset of an entrepreneur and apply it to managing capital.
4/ In order to act like an owner as a capital allocator, you need permanent capital.
This is exactly what Edelweiss Holdings has.
They work with a small group of investors who have created generational wealth and need to preserve it, while also positioning it to grow.
This is exactly what Edelweiss Holdings has.
They work with a small group of investors who have created generational wealth and need to preserve it, while also positioning it to grow.
5/ The Edelweiss chairman often talks about the "irreplaceable capital" of his investors.
"There is a sense of irreplaceability to this capital, so you have to start respecting it. Respect the fact that it is really irreplaceable. It represents a lifetime’s worth of savings."
"There is a sense of irreplaceability to this capital, so you have to start respecting it. Respect the fact that it is really irreplaceable. It represents a lifetime’s worth of savings."
6/ Deden & his team look to own "claims on natural monopolies and economic niches with high barriers to entry, pricing power, scarce economic substance, & run by similarly-minded managers and owners."
They want to own pieces of businesses that are run by like-minded individuals.
They want to own pieces of businesses that are run by like-minded individuals.
7/ There are three core beliefs that Tony Deden and his team hold:
- Scarcity
- Permanence
- Independence
- Scarcity
- Permanence
- Independence
8/ Edelweiss wants to find businesses that produce products with high demand & low competition.
Deden gives an example that they own part of business that provides machinery to make liquor bottles.
Lots of people make liquor, but only one company helps you make the bottle.
Deden gives an example that they own part of business that provides machinery to make liquor bottles.
Lots of people make liquor, but only one company helps you make the bottle.
9/ Edelweiss wants to own businesses that have stood the test of time.
One of the businesses that they own makes wine barrels — Not exactly a sexy business.
But they have made the best wine barrels for decades and it's likely they will only continue to do so.
One of the businesses that they own makes wine barrels — Not exactly a sexy business.
But they have made the best wine barrels for decades and it's likely they will only continue to do so.
10/ Edelweiss wants to find companies that are independent from reliance on others.
Every time you rely on an outside vendor or partner, you are introducing risk and decreasing independence.
No one is 100% independent, but many businesses are more independent than most.
Every time you rely on an outside vendor or partner, you are introducing risk and decreasing independence.
No one is 100% independent, but many businesses are more independent than most.
11/ Deden seeks scarce, permanent, & independent companies run by owners.
"An owner in a business is far more interested in his survival, in the first instance, than its necessary monetary value. No owner of a business wakes up every morning asking himself what he is worth."
"An owner in a business is far more interested in his survival, in the first instance, than its necessary monetary value. No owner of a business wakes up every morning asking himself what he is worth."
12/ "He is concerned with his products, he is concerned with his employees, he is concerned with his suppliers, he is concerned with his customers. To do that you have to have a time preference that is different from other people."
Deden sees time preference as an advantage.
Deden sees time preference as an advantage.
13/ Deden on most stock investors:
"You are an investor, you rent something, hoping that it will go up. You are making decisions based on expectations of what you think other people’s expectations are likely to be based on their framework."
Low time preference = renting!
"You are an investor, you rent something, hoping that it will go up. You are making decisions based on expectations of what you think other people’s expectations are likely to be based on their framework."
Low time preference = renting!
14/ Tony Deden turned Edelweiss' funds into a holding company in 2015, which is now called Edelweiss Holdings.
He purchases participation in great businesses that will continue to be great for decades.
He doesn't make investments. He purchases "participation" in his words.
He purchases participation in great businesses that will continue to be great for decades.
He doesn't make investments. He purchases "participation" in his words.
15/ This long term mindset allows Deden to make decisions that are different than traditional investors.
He lives in the Swiss Alps. He doesn't read the news.
Deden has no interest in macro economics or central bank decisions.
He wants to own great businesses for decades.
He lives in the Swiss Alps. He doesn't read the news.
Deden has no interest in macro economics or central bank decisions.
He wants to own great businesses for decades.
16/ The most surprising thing about Edelweiss Holdings's capital allocation?
They hold approximately 35% of their assets in physical gold.
Deden doesn't want his liquidity based on someone else's liability (Treasuries, etc).
They hold approximately 35% of their assets in physical gold.
Deden doesn't want his liquidity based on someone else's liability (Treasuries, etc).
17/ My favorite part about Tony Deden is that he knows what he wants to do and is clear about what he doesn't want to do.
If you don't fit within his sandbox, that is alright. You just aren't for him.
This applies to investors, potential investments, and colleagues.
If you don't fit within his sandbox, that is alright. You just aren't for him.
This applies to investors, potential investments, and colleagues.
18/ Tony Deden has shunned media opps for decades.
It is clear that he enjoys his private life. He has built a holding company with hundreds of millions of dollars in assets without needing any publicity.
Real Vision got him to do an interview though:
It is clear that he enjoys his private life. He has built a holding company with hundreds of millions of dollars in assets without needing any publicity.
Real Vision got him to do an interview though:
19/ The world needs more people like Tony Deden of Edelweiss Holdings.
Strong, independent thinkers who have incredibly long time horizons.
There are too many people seeking instant gratification today.
Your returns will improve if you can be more like Tony Deden.
Strong, independent thinkers who have incredibly long time horizons.
There are too many people seeking instant gratification today.
Your returns will improve if you can be more like Tony Deden.
20/ If you enjoyed this story or learned something today, you should sign up for the daily letter that I write to over 50,000 investors about business and finance.
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