The Price-to-Value Podcast with Southeastern Asset Management

CNX Resources: Nick DeIuliis on a 10+ Year Journey of Value per Share Creation with Southeastern Sep 16, 2024

Southeastern’s CEO and Head of Research Ross Glotzbach sits down with Nick DeIuliis, CEO of CNX Resources. They delve into a range of topics, beginning with Nick’s history in the Pittsburgh area and at CNX, where he has been an employee since the 1990s and became CEO in 2014. Ross and Nick reminisce about Southeastern’s engagement with CNX that led to a new board and approach to value per share creation. Nick discusses the company’s strategic transformation, which has driven substantial free cash flow per share generation. Topics include share repurchase, balancing the short-term and the long-term, hedging, and M&A. Nick and Ross also discuss CNX’s Tangible, Impactful, and Local sustainability efforts along with their Radical Transparency initiative. To close, Nick shares a glimpse into his personal life.

White Mountains: Manning Rountree on Value Creation and Partnership Jan 17, 2024

Manning and Ross cover a lot of ground, starting with Southeastern’s history of investing in White Mountains multiple times, dating back to its predecessor Fireman’s Fund under the leadership of Jack Byrne in the ‘80s. Manning talks about how he joined White Mountains and discusses how the spirit of Jack Byrne still lives on at White Mountains today. Next, Manning answers what makes insurance a good (or not so good) business and how White Mountains is uniquely advantaged within that space. He then talks about how the company attracts and adds value through great partnerships, like NSM, including a discussion of White Mountain’s sell discipline. Manning talks in detail about its partnerships with Kudu, BAM and PassportCard, as well as MAX, Bamboo and WM Partners. He discusses how White Mountains determines what future deals will be a good fit and also talks about how he thinks about share repurchase. Finally, Manning shares a bit about his personal hobbies.

AMG: Jay Horgen on Independence and Partnership in Asset Management Dec 01, 2023

Jay and Staley have a wide-ranging discussion, starting with the story of Jay’s formative Southern roots and how he got to know Southeastern before joining AMG. Jay talks about how the value proposition of AMG’s model magnifies the inherent competitive advantages of each independent Affiliate by offering access to a broad range of strategic capabilities, including succession planning, distribution capabilities, and strategic product development, among others. He highlights the importance of being an active partner while supporting AMG’s Affiliates’ independence.

Next, Jay discusses how AMG has evolved over time from a business profile primarily characterized by traditional, long-only active public equity exposures, to one that is more heavily weighted towards alternatives – private markets and liquid alternatives. Jay addresses the diversification benefits of performance fees related to the alternatives business, despite the perception of added volatility. Jay then discusses recent divestitures at strong prices that underscore the significant valuation discount for the overall business. Staley and Jay next talk about the impact of flows on near-term share price, why all flows are not created equal, and why cash is a better metric by which to measure the business. This leads to Jay discussing capital allocation: AMG’s primary goal is to invest in growth opportunities, but has also returned excess capital through share repurchases. Jay also talks about AMG’s views on sustainable investing as a secular growth trend.

They round out the discussion with Jay talking about Southeastern’s approach to engaging with our management teams and highlighting the inspiration that he took from The Outsiders, a book we share with all our CEO partners and highly recommend to listeners. Finally, Jay ends by discussing the importance of AMG’s culture and commitment to the community.

Brad Martin and Staley Cates Reflect on Our Long-Term Partnership May 04, 2023

Staley and Brad have a wide-ranging discussion, covering the many areas in which Brad and Southeastern have partnered together across investing, civic and charitable endeavors.

First, Brad begins by sharing his retail history beginning with Proffitt’s and his acquisition of Saks Fifth Avenue, where we overlapped as shareholders. He discusses managing a volatile business through September 11th, the lessons it taught him in patience with “non-linear returns,” as well as how he maintained his focus on creating value for shareholders when approached by Private Equity. Brad next discusses his experience on the board of Lululemon, from its early days as a small, privately-owned sports apparel business to the incredibly successful public company it is today. Brad and Staley then discuss Dillard’s, another company where we overlapped with Brad on the board during our ownership period from 2007-2012. Brad goes on to share his views on the state of retail today in the face of Amazon and the fast pace of digital change.

Next, the discussion focuses on Brad’s additional board appointments. Brad shares his timely views on the current bank crisis, drawing upon his experience as a member of the board at First Horizon, which he joined just before the onset of the great financial crisis. Brad and Staley then discuss Brad’s experience going on the board of Chesapeake Energy at Southeastern’s suggestion and his experience in working with us as shareholders while he held the board seat, including how his time at Chesapeake helped deepen his understanding as a FedEx board member. He then transitions to discuss his current role on the board at FedEx and why he believes “phase 2” of FedEx will be even more exciting than the first 50 years of the business. He talks about the positive implications of One FedEx for customers, employees and shareholders at FedEx. Brad also discusses another current investment overlap at Westrock Coffee, where Brad is Chairman of the Executive Committee, alongside CEO and Co-Founder Scott Ford, who we also partnered with in his prior role as CEO of Alltel.

Finally, Brad and Staley discuss civic and charitable overlap in Southeastern’s hometown of Memphis, TN. Brad discusses his one-year tenure as Interim President of the University of Memphis and the role he played in bringing in a transformational President, David Rudd, and the positive impact it has had on the broader Memphis community. The conversation concludes with Brad discussing Hope 2 Hire, a charity he founded that provides hands-on job training and life skills development for the prison population of Memphis.

Warner Bros. Discovery: David Zaslav on the Past, Present and Future of Entertainment Oct 24, 2022

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.

Hyatt: Mark Hoplamazian on the Future of Travel and the Importance of Caring for Others Feb 17, 2022

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.

Realogy: Ryan Schneider on Macro and Societal Shifts in Residential Real Estate Jan 20, 2022

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.

ESRT: Tony Malkin on COVID, ESG and the Enduring Power of NYC Aug 27, 2021

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.

Jonathon Jacobson and Staley Cates – 25 Years of Shared Values in Value Investing May 04, 2021

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.

GE: Larry Culp on Lean Manufacturing, Culture and COVID Jan 22, 2021

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].

Accor: Sébastien Bazin on Travel and Hospitality in a Post-COVID World Dec 11, 2020

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]

Margaret Casely-Hayford on How Values Impact Value Sep 01, 2020

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].

Mattel: Ynon Kreiz on the Enduring Power of Brands and Navigating a Global Pandemic Jun 01, 2020

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]

US Small Cap: Re-Opening After Two Decades Apr 14, 2020

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.

Global Volatility and Opportunity with Southeastern’s Portfolio Managers Mar 18, 2020

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.

Melco: Lawrence Ho on Geopolitics, Volatility and Opportunity in Asia Dec 09, 2019

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.

FedEx: Fred Smith and Alan Graf on E-Commerce, Global Trade and Opportunity Nov 06, 2019

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.

Will Thorndike on CNX, Outsiders and Private Equity Jul 30, 2019

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.

Live from Omaha: International Value with FEG, Southeastern and Evermore May 19, 2019

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.

Prem Watsa – Insights on Investing, Underwriting and the Importance of Culture Mar 06, 2019

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.

Three Generations of Leadership Jan 09, 2019

Southeastern’s leaders from three generations discuss succession planning and remaining engaged at the firm.

Unlocking Value in European Conglomerates Dec 18, 2018

Josh Shores and John Woodman discuss the opportunity for our management team to unlock what we feel is hidden value in European conglomerates.

Is Value Investing Dead? Nov 19, 2018

Our Global Investment Team discusses the case for active, long-term value investing in a short-term, momentum-driven environment.

The Potential Impact of Tariffs and Trade Wars Oct 16, 2018

Our Global Investment Team discusses tariffs and how a potential trade war may impact our portfolios.

The Evolution of Media and Telecom Sep 07, 2018

Our Global Investment Team discusses the evolution of the media and telecom industries.

Welcome to The Price-to-Value Podcast with Southeastern Asset Management Aug 23, 2018

Conversations with the Global Investment Team at Southeastern Asset Management, leaders in long-term, concentrated, engaged, value investing since 1975.

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