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The Price-to-Value Podcast with Southeastern Asset Management
51 minutes | Oct 24, 2022
Warner Bros. Discovery: David Zaslav on the Past, Present and Future of Entertainment
Following introductions, David shares with Ross lessons he’s learned over the course of his career from famed business leaders Jack Welch and John Malone. Next, David recalls what Discovery was like when he arrived in 2006 and the parallels to Warner Bros. Discovery today. At Ross’ request, David shares insights into his views and predictions about the media landscape from 2010 and assesses how those views have come to pass. David then opines on how the Warner Bros. deal came together and the turbulence along the way while getting various streaming services on a unified platform. Ross and David discuss what makes certain studios such as Disney, Warner Bros. or HBO unique, and how a studio can produce quality, award-winning entertainment while still making a profit. David provides his views on what Ross calls “the non-fiction” set of brands that Warner Bros. owns, such as HGTV, Food Network and CNN, which have become stronger assets in recent years. Next, Ross asks David to talk about John Malone’s approach to performance-based compensation for executives. Ross and David go on to compare notes on members of the Warner Bros. Discovery’s Board of Directors and their experience. They then discuss Discovery’s history of promoting sustainability and corporate social responsibility in its programming. Finally, Ross asks David to share an anecdote about the last time he spent a special moment with his family.
66 minutes | Feb 17, 2022
Hyatt: Mark Hoplamazian on the Future of Travel and the Importance of Caring for Others
Ross and Mark begin by discussing the global optimization of Hyatt as a brand under Mark's leadership. Next, Mark reviews his progress in increasing Hyatt’s global brand presence, while also transitioning to a more asset light strategy and discusses why Hyatt has been able to perform head-to-head with the industry’s largest brands to build a superior long-term growth pipeline. They then shift to discuss the impact of COVID on the hospitality industry - when Mark felt that consumers would begin to travel again, his views on when business and group travel will come back and the innovation and efficiencies that the last few years have inspired at Hyatt and in the industry more broadly. Next, they discuss the expansion of Hyatt’s resorts portfolio with the ALG deal and how Mark prioritizes buying vs. building into new locations and how different of a skill selling at the right price is to expanding. Mark then covers the evolving impact of home-sharing on the hospitality industry and why it is not an existential threat for hotel companies. Next, Mark talks about Hyatt’s purpose of “caring for people so they can do their best” and how he has prioritized wellbeing. He discusses Hyatt’s commitment to diversity, equity and inclusion and details the DEI initiatives the company has undertaken, as well as Hyatt’s – and Mark’s personal – focus on giving back. Mark then talks about his history of working with the Pritzker family and the family’s involvement at Hyatt today and discusses his thoughts on capital allocation and specifically share repurchase. Finally, he ends with a few personal recommendations on Hyatt properties to visit this year.
49 minutes | Jan 20, 2022
Realogy: Ryan Schneider on Macro and Societal Shifts in Residential Real Estate
Staley and Ryan start by discussing Ryan’s background and why he chose to join Realogy. Next, they discuss the interplay of technology and human agents in the real estate world and how that has shifted with COVID. Ryan then describes the pros and cons of iBuying and the opportunities that Realogy has in the luxury space. They shift to cover macro topics, including Ryan's view of the housing market, the future of the office post-pandemic, millennial home ownership, long-term interest rates and regional differences in housing markets. Ryan next details the difference between Realogy’s owned and franchise segments and potential refranchising opportunities that he has considered. Ryan describes the balance sheet improvements he has made since he joined the firm, including issuing convertible notes in 2021 and how he weighs capital allocation decisions versus buying back discounted shares. Finally, Ryan discusses Realogy's commitment to creating a diverse organization that operates in a socially and ethically responsible way and ends with a discussion of his outlook for the business.
56 minutes | Aug 27, 2021
ESRT: Tony Malkin on COVID, ESG and the Enduring Power of NYC
Ross and Tony start by discussing Tony’s background, having grown up in the real estate industry, how he forged his own path and how that lead him to ESRT. Tony describes ESRT’s unusual IPO process and discusses how having a separate family office helps him as a real estate operator. Next, they discuss the iconic nature of the Empire State Building Observatory and how it has quickly adapted in the COVID environment. They then discuss how ESRT has been a leader in prioritizing ESG initiatives even before the company’s IPO. Tony discusses plans to reach net-zero by 2035 and talks about Governance at ESRT, covering the supervoting share structure, as well as capital allocation considerations like when is the best time to buy back shares. Next, they shift to discuss how Tony and team navigated the business through the COVID environment and how it impacted everything from the safety of its buildings and tenants, capital allocation decisions and M&A opportunities. Tony describes how the Observatory was the first New York attraction to reopen in July 2020 and discusses how he know that both NYC and ESRT would bounce back from the pandemic. Finally, Tony ends by sharing what he learned by leading a public company over the last 18 months and what he likes to do with his family in New York City.
70 minutes | May 4, 2021
Jonathon Jacobson and Staley Cates – 25 Years of Shared Values in Value Investing
In this episode, Southeastern's Vice-Chairman Staley Cates interviews highly respected peer and long-term friend of the firm, Jonathon Jacobson, Founder of HighSage Ventures and former CIO and Co-Founder of Highfields Capital. Staley and Jonathon have a wide-ranging discussion, covering the past, present and future of the industry. They begin with Jonathon’s decision to close Highfields and return investors’ capital in 2018, amidst a backdrop of value being dramatically out of favour [4:39 – 10:44]. Jonathon then touches on the work that his family foundation, the One8 Foundation, is doing and the long-lasting impact of COVID on education [10:45 – 16:19]. Next, Jonathon shares his reflections and insights on investing after having stepped away from the computer every day [16:20 – 23:30]. He discusses value vs. growth and how those traditional measures have morphed over time, touching on some of the biggest mistakes he believes value investors have collectively made [23:31 – 28:10]. Staley and Jonathon then discuss active vs. passive and how the institutional investor committee mindset has shifted [28:11 – 32:17]. Jonathon delves deeper into how his investment philosophy has developed over the last two decades [32:18 – 35:47]. Next, he addresses the recent SPAC mania and GameStop frenzy, contrasting this with the long-term value of shorting and highlighting his experience shorting Enron [35:48 – 45:33]. Next, Jonathon discusses lessons learned from setting up an asset management business, including key takeaways on getting the right structure, hiring the right talent and the need to evolve over time as a firm grows [45:34 – 49:26]. Staley and Jonathon discuss interest rates and inflation as a risk to the industry [49:27 – 53:28] and then discuss great businesses and management teams on Jonathon’s wish list, covering a few shared war stories along the way [53:29 – 58:24] Jonathon talks about the importance of a long-term focused client base [58:25 – 1:05:10], shares some of his favorite reads [1:05:11 – 1:06:26] and ends by talking about his future plans [1:06:30 – 1:08:09]. The information presented is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities. Securities identified do not represent all the securities purchased, sold, or recommended to advisory clients. The views and opinions expressed by the Southeastern Asset Management speakers are their own as of the date of the recording. Any such views are subject to change at any time based upon market or other conditions. Southeastern Asset Management disclaims any responsibility to update such views. These views should not be relied upon as investment advice. And because investment decisions are based on numerous factors may not be relied upon as an indication of trading intent on behalf of any Southeastern Asset Management product. Neither Southeastern Asset Management, nor the speakers can be held responsible for any direct or indirect loss incurred by applying any of the information presented. Mr. Jacobson’s experience is unique and any other Longleaf shareholders experiences may vary. Past performance does not guarantee future results, so your returns may be more or less than those experienced. No fee was paid to Mr. Jacobson for his participation in this podcast.
51 minutes | Jan 22, 2021
GE: Larry Culp on Lean Manufacturing, Culture and COVID
In this episode, Southeastern’s Vice-Chairman Staley Cates interviews Larry Culp, Chairman and CEO of General Electric. They discuss how Lean manufacturing is much more than a process and how it can define a culture that is committed to continual improvement. Larry begins with an introduction to “Lean” and what it means to him [3:37 – 5:42]. They discuss whether Lean is a culture or a process [5:43 – 8:34] and what potential problems the approach seeks to address [8:35 – 10:50]. Larry next describes how he first learned about Lean and what made him embrace it as the optimal way to run a business and shape a culture [10:51 – 13:01]. Next, Larry discusses what made him take the role of CEO at GE in the first place and how he is leading GE to embrace Lean, using his experience from Danaher [13:02 – 16:54]. He then discusses the importance of team versus individual thinking in the context of Lean [16:55 – 19:34] and how to bring people on board with the approach [19:35 – 23:06]. Next, Larry discusses the core tenet of waste reduction in more detail [23:07 – 25:26], as well as challenges and opportunities within the supply chain [25:27 – 27:25]. Larry next describes incorporating the approach at GE in more detail. He answers why such a common sense approach is not more universally used [33:22 – 34:50] and discusses other leaders that he respects in terms of Lean implementation [34:51 – 36:38]. He rounds out the Lean tutorial with guidance on what metrics we as analysts can use to measure progress and success from the outside [36:39 – 38:14]. Next, they shift to cover GE more broadly, with Larry discussing GE’s culture and changes he has implemented since taking on his CEO role [38:15 – 40:12] as well as his goals for the next 3-5 years [40:13 – 41:13]. Larry then addresses how he has managed the business through a challenging COVID environment [41:14 – 43:37], discusses GE’s commitment to be carbon neutral by 2030 [43:38 – 45:07] and gives an update on the work to reduce GE Capital [45:08 – 47:14]. Finally, Larry shares his outlook for GE as a business and what makes him most excited as a (significant!) owner of the stock [47:15 – 48:17].
57 minutes | Dec 11, 2020
Accor: Sébastien Bazin on Travel and Hospitality in a Post-COVID World
In this episode, Southeastern’s London-based Senior Analyst and Principal, John Woodman, interviews Sébastien Bazin, Chairman and CEO of Accor. They discuss the short-term impact and long-term implications of COVID-19 on the hospitality industry [1:37 – 3:40], as well as steps Accor has taken to position itself to be a beneficiary of the travel recovery [3:44 – 6:20]. Next, Sébastien discusses the benefits of shifting to an asset-light model, [6:24 – 8:05] the recently announced merger with Ennismore and Accor’s plans to build out its lifestyle business. [8:10 – 15:23] They then discuss the potential for the pandemic to accelerate consolidation in the industry and discuss the unexpected opportunities that COVID has created. [15:25 – 18:39] Next, they discuss Sébastien’s unique background and his shift from engaged private equity investor in Accor to CEO and Chairman of the business, touching upon Colony Capital’s and Southeastern’s overlap as aligned shareholders during our prior investment in Accor and sharing what he has learned from sitting on both sides of the boardroom table. [18:43 – 24:14] They discuss how Accor’s culture spans across a large and geographically diverse business, as well as Sébastien’s views on capital allocation. [24:17 – 33:50] Next, they shift to discuss the importance of engaging with shareholders to ensure strong governance and drive positive outcomes and how shareholder engagement in the US differs from engagement in Europe. Sébastien discusses how he balances the competing interests of stakeholders to ensure long-term sustainability of the business. [33:52 - 40:16] He then discusses steps taken by the All Heartist fund to provide support for employees throughout the COVID crisis [40:18 – 43:46] and discusses the importance of ESG factors and diversity and inclusion at Accor in more detail. [43:48 – 48:58] Finally, Sébastien shares some personal insights in a short round of questions at the end. [49:00 – 55:20]
66 minutes | Sep 1, 2020
Margaret Casely-Hayford on How Values Impact Value
In this episode, Southeastern’s London-based Global Head of Client Relations and Communications, Gwin Myerberg, Senior Analyst, John Woodman, and Junior Analyst, Alicia Cardale, have a broad-ranging discussion with Margaret Casely-Hayford CBE. A British lawyer by trade, Margaret is an expert on corporate governance and diversity and inclusion, with extensive insight and experience in her roles as corporate board executive, charitable trust board trustee, entrepreneur and a leader within the arts and education world in the UK. They discuss Margaret’s background and family history of activism [3:19-6:43] and how Margaret created her own opportunities and learned the importance of building a brand and a network [7:33-14:30]. Margaret outlines the biggest challenges obstructing diversity in corporate boards and how to address them [14:43-22:15] and how the recent spotlight on racial injustice may help drive structural change [22:15-26:02]. Next, Margaret discusses how corporations and investors can better assess board candidates [26:14-30:40], what she views to be the most important aspects of corporate governance for benefitting shareholders [30:40-38:48] and why she believes corporations are more open to engaging with long-term shareholders on these issues today [38:49-41:58]. Margaret then discusses her passion for championing education and mentorship through various charitable organizations and the importance of local engagement and ownership to drive success [41:59-54:47]. Finally, Margaret shares some personal insights in a short round of questions at the end [55:17-1:04:00].
62 minutes | Jun 1, 2020
Mattel: Ynon Kreiz on the Enduring Power of Brands and Navigating a Global Pandemic
In this episode, Senior Analyst Lowry Howell and CEO and Head of Research Ross Glotzbach interview Ynon Kreiz, CEO of Mattel. They discuss how Ynon went from a windsurfing instructor to media entrepreneur at Fox Kids Europe, Endemol and Maker Studios before becoming CEO at Mattel. [3:06-9:02] Next, Ynon discusses how Mattel has remained innovative through the current environment, how COVID-19 has impacted the toy industry, as well as Mattel’s near-term strategy and how Mattel has given back during this unprecedented time. [15:12-29:56] Ynon discusses core brands Barbie, Fisher Price and Hot Wheels, as well as up and coming growth brands, including Masters of the Universe. [35:11-45:23] Next, he discusses Mattel’s intellectual property (IP) monetization plans and Mattel’s long-term intrinsic value and growth proposition. [45:23-53:52] Finally, Ynon shares some personal insights in a short lightning round of questions at the end. [56:42-59:32]
29 minutes | Apr 14, 2020
US Small Cap: Re-Opening After Two Decades
In this episode, the Longleaf Partners Small-Cap Fund portfolio managers – Mason Hawkins, Staley Cates and Ross Glotzbach – discuss why we believe re-opening the Fund will benefit our long-term investors. We closed the Fund to new investors in August 1997 to manage our size against any potential liquidity constraints that would limit the opportunity set and to avoid diluting our shareholders, given rising cash at that time. The Fund has remained closed to new investors for more than two decades over the course of various market conditions. Mason, Staley and Ross discuss what makes the US Small-Cap universe so compelling today, how our outlook compares to prior downturns, the small-cap companies we are excited to own today and the new opportunities we are finding in the current environment.
48 minutes | Mar 18, 2020
Global Volatility and Opportunity with Southeastern’s Portfolio Managers
The unprecedented situation with COVID-19 has resulted in dramatic volatility across all global markets. Southeastern's portfolio managers share their current thoughts, while recognizing that the situation is changing every day. In this episode, Mason Hawkins (Chairman and Co-PM of Global, Non-US, US Large Cap and US Small Cap), Staley Cates (Vice-Chairman and Co-PM of Global, Non-US, US Large Cap and US Small Cap), Ross Glotzbach (CEO and Co-PM of Global, Non-US, US Large Cap and US Small Cap), Ken Siazon (PM of Asia Pacific and Co-PM of Non-US) and Josh Shores (Co-PM of Non-US) discuss the expected near-term impact of COVID-19 and resulting market volatility on our portfolios, as well as our long-term outlook for the opportunity that we believe this volatility will create.
56 minutes | Dec 9, 2019
Melco: Lawrence Ho on Geopolitics, Volatility and Opportunity in Asia
Southeastern’s Asia Pacific Co-PMs Ken Siazon and Manish Sharma interview Lawrence Ho, CEO and Chairman of Melco International and Melco Resorts. They cover a range of topics, starting with the history of Melco, the evolution of the Melco-Crown relationship over time and lessons learned from Lawrence’s father and industry legend, Stanley Ho. They go on to discuss cycles of volatility in Macau, the opportunity in Japan, the impact of geopolitics and macro factors on Melco and its share price and his outlook for Melco’s growth in Macau, amid pending license renewals and infrastructure improvements. They end with a lightning round of questions that gives insight to how Lawrence Ho thinks about the most important topics – ranging from EBITDA growth to his preference for sushi vs. dim sum.
64 minutes | Nov 6, 2019
FedEx: Fred Smith and Alan Graf on E-Commerce, Global Trade and Opportunity
In this episode, our Vice-Chairman Staley Cates interviews FedEx’s CEO and Founder Fred Smith and EVP and CFO Alan Graf. They discuss the evolution and growth of e-commerce, the opportunity it presents for FedEx and how the company has positioned itself strategically to take advantage; why Amazon will never “kill FedEx”; the demise of the US Postal Service; the two-player US parcel market (FedEx and UPS) and why FedEx has a better mousetrap; the long-term expected benefits of the TNT acquisition for FedEx’s intercontinental business, despite recent short-term pain; the negative impact of Trump’s trade wars; FedEx’s unique dashboard on the world economy; management’s top three objectives for the business and management succession planning.
38 minutes | Jul 30, 2019
Will Thorndike on CNX, Outsiders and Private Equity
CEO and Head of Research Ross Glotzbach and Vice-Chairman Staley Cates interview Will Thorndike, author of The Outsiders – Eight Unconventional CEOs and Their Radically Rational Blueprint for Success and Chairman of CNX Resources. They discuss progress at CNX, whether energy companies can be considered “good businesses”, the importance of a capital allocation mindset in commodity businesses, frothiness in the private equity world and the characteristics and long-lasting benefits of “Outsiders” in the US and overseas.
58 minutes | May 19, 2019
Live from Omaha: International Value with FEG, Southeastern and Evermore
In this episode, we share excerpts from a panel on International Value Investing that Southeastern co-hosted with Evermore Global Advisors in Omaha around the Berkshire Hathaway annual meeting. Moderated by Greg Dowling from Fund Evaluation Group, Southeastern’s Josh Shores and Evermore’s David Marcus discuss their definition of “value”, the importance of engaging with management and having a local network and the bottom-up opportunity set outside the U.S. today.
48 minutes | Mar 6, 2019
Prem Watsa – Insights on Investing, Underwriting and the Importance of Culture
Vice-Chairman Staley Cates interviews Prem Watsa, Chairman and CEO of Fairfax Financial Holdings. They discuss surviving a short attack, Fairfax’s long-term investment track record, underwriting history and unique culture, and Prem’s view on private equity, active vs. passive and value investing.
29 minutes | Jan 9, 2019
Three Generations of Leadership
Southeastern’s leaders from three generations discuss succession planning and remaining engaged at the firm.
34 minutes | Dec 18, 2018
Unlocking Value in European Conglomerates
Josh Shores and John Woodman discuss the opportunity for our management team to unlock what we feel is hidden value in European conglomerates.
27 minutes | Nov 19, 2018
Is Value Investing Dead?
Our Global Investment Team discusses the case for active, long-term value investing in a short-term, momentum-driven environment.
25 minutes | Oct 16, 2018
The Potential Impact of Tariffs and Trade Wars
Our Global Investment Team discusses tariffs and how a potential trade war may impact our portfolios.
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