![Exor: Fiat Crisis to Ferrari Glory - [Business Breakdowns, EP.229]](https://megaphone.imgix.net/podcasts/81a71ab6-9e6b-11f0-8aff-7bd806e17203/image/1c411f84b9b949374f0accaa0a5ff38a.jpg?ixlib=rails-4.3.1&max-w=3000&max-h=3000&fit=crop&auto=format,compress)
Exor's governance model focuses on finding the right leaders and then giving them space to execute. They review plans and organizational structures but avoid micromanagement, viewing their role as a supportive yet challenging partner to the CEOs of their portfolio companies.
Instead of complaining that its stock trades at a steep discount to its net asset value (NAV), Exor's management pragmatically views this as a chance to invest in themselves. They trimmed their highly appreciated Ferrari stake specifically to fund share buybacks at this significant discount.
Exor is strategically entering the healthcare sector not through a large acquisition, but by taking significant minority stakes in companies like Philips and Institut Mérieux. This gives them a "front row seat" to learn the industry, build knowledge, and establish credibility for a long-term pivot.
Although Exor's investment in reinsurance company PartnerRe underperformed, the exit was strategically valuable. Beyond the financial return, Exor leveraged the sale to Covea by retaining key talent and forming a partnership with the buyer to launch its new asset management firm, Lingotto.
Under John Elkan, Exor consolidated multiple complex family holding companies (IFI and IFIL) into a single entity. Moving the legal headquarters to the Netherlands provided a competitive tax rate, exemptions on gains and dividends, and regulatory simplicity, streamlining the management of its global assets.
The key lesson from Exor is that patient, long-term investing doesn't mean avoiding action. Learned from an early survival crisis, their leadership makes a few specific, intentional decisions each year to refresh the portfolio, demonstrating that decisiveness is critical even with a multi-generational time horizon.
John Elkan's development as a leader was profoundly shaped by his decision to hire outsider Sergio Marchionne to save Fiat. Marchionne not only executed a legendary turnaround but also became a personal mentor to Elkan, demonstrating the value of external expertise in guiding the next generation of a family empire.