Pick gene pool with care on family concerns; Sir Henry Keswick maintains that shares in Jardine Matheson have outperformed those in Berkshire Hathaway
March 18, 2014 Leave a comment
March 14, 2014 8:12 am
Pick gene pool with care on family concerns
By Neil Collins
While Keswicks nurture, newer families piggy-bank raid
Sir Henry Keswick maintains that shares in Jardine Matheson have outperformed those in Berkshire Hathaway, the stock widely considered about the best long-term investment on the planet. Well, it depends where you start, but Jardine shares have multiplied 10 times in 12 years, never mind the dividends.
By Jardine’s standards, Warren Buffett’s venture is something of an upstart since Sir Henry’s family company is now in its eighth generation, with one of his nephews at the helm. This week, Jardine did what the Keswicks like doing best, thumbing its corporate nose at governance. It is downgrading the group listings in London from premium to plain rather than comply with new rules on the influence of controlling shareholders.
The fact that Jardines is family-controlled is a powerful reason why us shareholders bought in the first place (alas, not long enough ago). The Keswicks look after the business as if they own it, because they do. If that upsets the governance brigade, well, tough.
Over 30 years ago, a midnight manoeuvre to issue and immediately swap shares in Hong Kong Land, then an associate company, stymied a takeover attempt by Li Ka-shing, prompting Nicholas Sibley, then managing director of Jardine Fleming, to brag: “The empire strikes back.”
In 1994, the press conference called to announce Jardine’s flit from the Hong Kong Stock Exchange attracted hundreds of journalists and a dozen TV cameras – but no Keswicks. Charles Powell was put up to catch the flak from the hacks.
In practice, the listing downgrade will make no difference. As the ultimate “buy and forget” investment, the market is thin, which is why few analysts cover it.
The authorities deserve some sympathy. Where the Keswicks nurture their empire, newer families have treated their premium listings as piggy banks to be raided, and the loss of Jardine’s is less damaging to London than a repeat of scandals like ENRC and Bumi. As with DMGT, another successful family-controlled business (thrown out of the FTSE indices for non-compliance), it pays to pick your gene pool with care.
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