When Daniel and I first sat down to record an episode on Exor, we joked that it felt like cheating. Here was one of our favorite businesses in the world — Ferrari — trading on its own at a rich multiple, while this obscure Dutch-Italian holding company sat in the background as Ferrari’s largest shareholder, plus a bunch of other assets, at a price that implied a massive discount.

If you’ve followed our work for a while, you’ll remember that when we covered Ferrari as a standalone company, we loved almost everything about the business and almost nothing about the valuation. The brand is nearly bulletproof, the economics are phenomenal, and the customer base is about as price-insensitive as you’ll find. The tricky part was deciding whether to pay close to 40x earnings for shares…

Exor gives us a different entry point, though, and one that comes at a much more digestible price.

Roughly two-fifths of Exor’s gross asset value is just its stake in Ferrari. Yet the market value of that Ferrari stake alone is greater than Exor’s entire market cap. Let me say that again so we’re all on the same page: Exor’s Ferrari stake (which is only a fraction of the company’s total assets) is worth more than Exor’s current market value on the Amsterdam stock exchange.

Exor’s net asset value — the value of everything it owns, minus debt — is around €36 billion, while its equity trades at a roughly €15 billion valuation. In very round numbers, you’re paying about forty cents on the euro for Exor’s assets (including, namely, its position in Ferrari).

You can think about it two ways. Either you’re buying Ferrari at less than half the usual price, or you’re buying Ferrari at a normal price and getting everything else in the portfolio — CNH Industrial, Stellantis, Philips, Juventus, The Economist, Christian Louboutin, a VC portfolio including exposure to Neuralink, and more — for free.

Sounds too good to be true, right? We discuss, below.

— Shawn

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Exor NV: Too Good To Be True?

The Berkshire Of Italy (Kind Of)

The cleanest mental model I’ve found for Exor is “Berkshire Hathaway, but Italian, messier, more focused on listed holdings than wholly owned subsidiaries, and less insurance.”

Okay, so maybe not all that similar to Berkshire literally, but the idea is that they’re both holding companies making top-down capital allocation decisions, home to a suite of high-quality assets.

Legally, Exor NV is a Dutch company with headquarters in the Netherlands, but its roots are deeply Italian. The story starts with Giovanni Agnelli, who founded Fiat and, in the 1920s, began consolidating his holdings into a family vehicle that would eventually become Exor. He bought Juventus back in 1923, which makes the iconic football club one of the group’s longest-standing assets, alongside Fiat itself.

Over the decades, this original holding structure was merged, restructured, and rebranded multiple times. The modern Exor is the outcome of that process: a publicly-traded family office that pools the Agnelli family wealth into one vehicle with ownership of a portfolio of public and private companies, led today by Giovanni’s grandson, John Elkann.

Like Berkshire, Exor doesn’t run factories or car dealerships or magazines directly. It holds stakes in those businesses and focuses on capital allocation decisions using the dividends from these subsidiaries while deciding when to buy more, when to sell, when to spin something off, and how to recycle cash into the next idea.

Evidently, what I’m most interested in is Exor’s exposure to Ferrari.

On that point, Exor owns roughly 20% of Ferrari’s outstanding shares and, thanks to enhanced voting rights, almost 30% of the votes. Despite comprising two-fifths of Exor’s gross assets, as mentioned, when you line up Exor’s current market cap against its stake in Ferrari, the Ferrari investment by itself is worth more than the whole of Exor’s equity. That is, uhh, not supposed to happen in efficient markets!

That was the launching point for my deep dive into Exor, trying to understand to what extent this reflects some sort of market inefficiency, or whether there are legitimate considerations that could explain this vast disparity.

From Fiat Dynasty To Ferrari Anchor

To understand Exor, you have to know how this quirky mix of assets ended up under a single umbrella.

The Agnelli family’s relationship with Ferrari goes back to the late 1960s, when they acquired 50% of the company and gradually raised that stake as high as 90% over the following decades. Consequently, for a long time, Ferrari effectively lived inside Fiat. Only later was Ferrari spun out as its own listing, with Exor retaining a minority stake that has since become the centerpiece of its own portfolio.

That long relationship and the willingness to hold through multiple market cycles is important. Very few capital allocators can point to a fifty-plus-year record in a single crown jewel asset and say, “We just never sold.” Whatever else you think about Exor, the patience around Ferrari is impressive.

Alongside Ferrari, the family built an eclectic collection of other holdings, too.

On the public side of the portfolio, roughly three-quarters of Exor’s assets today are listed companies. One large piece is CNH Industrial — a capital-intensive but globally important manufacturer of agricultural and construction equipment that competes with John Deere.

Stellantis, born from the merger of Fiat Chrysler and PSA, adds a fleet of vehicle brands like Jeep, Chrysler, Dodge, Peugeot, Maserati, and Ram. And Philips, yet another portfolio holding, brings exposure to diagnostic healthcare equipment and CPAP machines.

Juventus, also a publicly-traded company, is what Daniel and I like to call a trophy asset (it doesn’t throw off much profit but is still worth billions due to the bragging rights of majority ownership).

Then there’s the private side of the portfolio. Exor owns a substantial stake in The Economist, the weekly business/politics magazine that’s arguably one of the most influential media brands in the world. On top of that, it owns 24% of Christian Louboutin, the luxury shoe maker famous for its red soles.

It has also seeded Lingotto, an asset-management firm, plus a venture capital ecosystem that has put several hundred million euros into over a hundred startups, including names like Elon Musk’s Neuralink and the fintech star, Brex. Correspondingly, Exor hosts Italy’s largest tech conference and has brought in former Apple and Amazon executives to help run parts of this effort.

Grasping Exor entirely is, well, messy. There’s a lot going on! You could say the same about Berkshire Hathaway, but the difference boils down to the market’s faith over the years in Buffett & Munger (RIP) versus Exor’s John Elkann.

Exor’s got ultra-high-end luxury brands at one end of the spectrum and deeply cyclical, capital-heavy industrials at the other. There’s a money-losing football club, a venerable magazine, and a VC portfolio full of moonshots. It’s a very European family conglomerate, you might say.

That messiness is part of the DNA, evidently. Fiat itself used to be a mega conglomerate, and even today, after the spin-offs and mergers, you can still see that legacy in Exor’s structure.

It also helps explain why the stock is so cheap.

Why The Discount Exists

Holding companies almost always trade at some discount to the sum of their parts. Exor is no exception. The question is whether the current 60% gap between Exor’s market cap and net asset value is justified.

On the podcast, I grouped the reasons for a discount into three broad buckets: complexity, friction costs, and skepticism about capital allocation.

Complexity is the obvious one.

Most investors don’t want to build a model that spans Ferrari, CNH, Stellantis, Philips, Juventus, The Economist, Louboutin, and a grab bag of private holdings and early-stage ventures. If you’re a growth-oriented investor, you’re not thrilled about the autos and tractors dragging down your Ferrari exposure. If you’re a deep value industrials person, Ferrari trading on a premium multiple probably makes you nauseous. If you like clean stories, the idea of having Juventus and Neuralink bundled into your Ferrari bet is a non-starter.

That “unloved middle child” aspect — where almost every style of investor dislikes at least one major piece of the portfolio — is tailor-made for a conglomerate discount.

Then there are the frictional costs.

Exor can’t just snap its fingers and turn €36 billion of assets into €36 billion of cash. If they tried to liquidate everything, their own selling pressure would move markets against them, there would be tax consequences, and there are legal and administrative costs to consider. The real world always erodes theoretical value at the margin.

A stark example shows up in their history. When Exor moved its legal headquarters from Italy to the Netherlands, Italian tax authorities hit the company with an “exit tax” bill that ultimately resulted in a payment of about €845 million to settle the dispute. Almost a billion euros vanished in a single negotiation, presumably as punishment for Exor “abandoning” its home country.

That was different in nature from simply selling down stakes, but it illustrates the point that NAV isn’t free cash, and markets are rational to demand some haircut for that.

Finally, there’s the human element. Investing in Exor means you are, in a very real sense, betting on John Elkann and the small group of people who make capital allocation decisions on behalf of the Agnelli family.

Elkann leads Exor. He also serves as chairman of both Ferrari and Stellantis. The Agnelli family controls more than 85% of the voting rights in Exor while owning only about 55% of the economic interest. That’s not unlike the dual-class share structures we see in Silicon Valley, where founders retain outsized control relative to their equity stake.

I don’t love that asymmetry in shareholder governance, nor do I like that Elkann’s personal compensation sits in the eight figures when you include his roles across the group, especially given that the underlying wealth is already his family’s. If anyone should be incentivized to run Exor well without even getting paid a dollar of salary, it should be John Elkann!

But for me, the more important datapoint is what’s happening at the share-count level and on the balance sheet.

Since 2019, Exor has been shrinking its share base by nearly 3% a year, on average.

They’ve approached those buybacks intelligently, too. Rather than simply plodding into the open market and bidding up their own stock, Exor launched a reverse Dutch auction to repurchase around €1 billion of shares. They set a price range, invited shareholders to submit the price at which they’d be willing to sell, and then executed the lowest-cost blocks of asks first. That kind of structure ultimately saved money and made every euro of buyback go further.

Meanwhile, the balance sheet is conservative. About 95% of Exor’s debt is fixed-rate at low levels. S&P rates the company A–, which is comfortably “investment grade.”

Said differently, this isn’t a levered roll-up that’ll fall apart in a downturn. It’s a relatively low-risk balance sheet sitting behind a portfolio of mostly public assets, trading at an enormous discount.

None of this means you should ignore the governance issues. The family control structure effectively makes outside shareholders second-class citizens when it comes to voting power, and Elkann’s pay package isn’t what I’d describe as modest. But in my view, the appropriate discount for those concerns is nowhere near 60%.

Historically, Exor has traded closer to a 25–30% discount to NAV. Even if you haircut the current NAV aggressively — mark down the private assets, assume heavy frictional costs, assign a big “management penalty” — you still struggle to rationalize the current gap without assuming that Elkann is irredeemably bad at his job.

To that last point, though, Elkann’s track record suggests otherwise.

Betting With The Agnelli Family

When Elkann began to take the reins in the early 2000s, Exor, known as IFI at the time, wasn’t in a great place. Debt was high, the industrial subsidiaries were under pressure, and the risk was that the Agnelli empire would slide into the “vanity phase” that Giovanni Agnelli once publicly warned about: the stage where the inheriting generations coast on the family spoils.

Instead, the last two decades have been a genuine turnaround.

One of Elkann’s most important moves was backing Sergio Marchionne as CEO of Fiat in 2004, which, in hindsight, would be seen by some as a move that not just saved Fiat but the broader Italian auto industry. Under Marchionne, Fiat acquired Chrysler during the financial crisis and spun off CNH Industrial. Eventually, Fiat-Chrysler merged with the French company, PSA, to create Stellantis. Along the way, Ferrari was spun out into a standalone company, too — a move that unlocked tremendous value and turned Ferrari into the powerhouse holding we see inside Exor today.

Since Ferrari was spun out, it has delivered a total shareholder return of more than 11x, versus just under 3x for the MSCI World. As a result, Ferrari’s share of Exor’s NAV climbed from around 15% in 2015 to nearly 50% today.

Critics sometimes dismiss this by saying, “Well, that wasn’t Elkann’s decision — the original Ferrari investment goes back decades.” That’s true. But it’s surprisingly hard in business not to mess up a great inheritance. Not selling Ferrari prematurely, supporting its spinoff, and letting it compound into a dominant piece of the portfolio still counts for something in my book.

If you prefer an outside scoreboard, Exor has also attracted some high-quality fellow travelers. Guy Spier, one of the investors Daniel and I admire most, owns Ferrari directly and holds Exor as another way to express that same underlying view. And Exor has teamed up with Sir Jony Ive, the legendary Apple designer behind many of the products we all have in our pockets, on a multi-year collaboration focused initially on Ferrari and later on other luxury projects within the Exor universe, such as Louboutin.

That kind of partnership doesn’t magically increase intrinsic value, but it’s a positive signal nonetheless. Jony Ive isn’t going to waste his time with a low-quality group of assets and managers. The fact that he’s willing to tie his brand to Ferrari and Exor suggests this isn’t some creaky old conglomerate.

At the same time, Daniel and I are very aware that this is, at its core, a Ferrari-anchored thesis.

If Ferrari’s business stumbles in a big way, or if the market re-rates Ferrari from an ultra-premium luxury compounder to something closer to a premium auto manufacturer, Exor’s NAV growth will slow, and the perceived quality of the whole portfolio will take a hit. To me, the main risk is not so much what Exor owns today, but what it might choose to own tomorrow if it keeps selling Ferrari to fund new ideas.

They’ve already sold down a few billion euros’ worth of Ferrari this year to reduce concentration and build a war chest for acquisitions, and that move likely contributed to the discount widening. As an outside shareholder, I’d frankly prefer the opposite: I’d almost rather see Exor become even more concentrated in Ferrari, not less, to make the thesis even cleaner, in terms of buying Ferrari at a discount.

Alas, the Agnelli family, understandably, wants to diversify their wealth. That tension between what’s cleanest for public shareholders and what’s most comfortable for a multi-generational dynasty is one of the central dynamics here.

This is why we’re inclined to set an exit rule around the Ferrari stake. If the family continues trimming the position to the point where Ferrari is no longer the clear crown jewel, I’d want to reassess the thesis and probably move on unless we had equally high conviction in whatever they were buying instead.

Until then, though, I’m happy to sit in the passenger seat as a so-called “Sidecar Investor,” waiting for that NAV discount to narrow, as Exor’s NAV keeps compounding, too.

The right way to think about Exor is not through the lens of next quarter’s earnings (its earnings aren’t very meaningful, anyways, since price swings in their stock holdings are accounted for on Exor’s income statement), but through a simple two-part question: how fast can NAV grow over the next three to five years, and where might the discount to that NAV reasonably settle over time?

Valuation & Portfolio Decision

The way I approached the valuation was fairly straightforward then, which is, to be fair, how you could describe most of our valuation models.

I broke out Exor’s net asset value, and then mapped out what the IRR would be in various bear cases, base cases, and bull cases, tweaking NAV growth assumptions and the expected discount to NAV for the stock.

In the bear case, I assume that Exor’s valuation normalizes at a 50% discount long term, which I think would be very extreme, but if their NAV compounding were to slow down dramatically to, say, 5% a year, I could see this type of discount being sustained.

But even in that case, assuming a below-average rate of compounding in their assets, and a pretty punitive discount accordingly, you could still underwrite an expected return of 10% a year over the next 5 years from that 5% compounding and from some modest compression of the extreme discount to NAV that we’re seeing today (see the screenshot above).

In a base case, if Exor’s NAV compounds at an average rate of 7% a year, and the NAV discount closes further but still remains at the top of its historical range at 40%, you’d expect a 16% annual return from buying at current prices of around 72 euros a share.

And then, in my bull case, just by having Exor return to what would be a more normal 30% discount to NAV, with slightly above average compounding relative to the market historically but still below their actual results over the last 15 years, you’d expect to generate a return of 20%+ a year over the next 5 years(!)

This is truly, to me, what a margin of safety looks like. There is so much room for error that, even with relatively poor results, the stock can perform decently well from current prices, with serious upside in scenarios that aren’t even crazy-optimistic.

Banking on 9% NAV compounding in a bull case would be most people’s baseline and is, honestly, modestly optimistic at best.

So, Daniel and I are excited about the opportunity, and as such, we’ve decided to give Exor a spot in our portfolio with a 7% weighting. 7% isn’t huge, but it’s large for our first-time investment in a company. Usually, we prefer to begin with smaller starter positions, but in this case, the thesis is so clear to us that we’re happy to begin with a sizable position and consider adding further over time.

For more, check out our podcast on Exor here — updates on our Intrinsic Value Portfolio below!

Weekly Update: The Intrinsic Value Portfolio

Notes

• Exor: Added as a 7% portfolio position at cost, with an average share price of $85.50 in EXXRF OTC shares in the U.S.
  

• It’s been a relatively quiet two weeks with the holidays, so not too much news to report. With the page turning on 2025, Daniel and I recently had the chance to reflect on our lessons from 2025 and goals for 2026 with members of The Intrinsic Value Community — any curious readers may find the link to our slide deck for the presentation here. The recording of the call, however, and live access to the weekly calls we do as a group, are available only to approved members.
  

  • For those interested in becoming members, you can learn more and apply here.

Quote of the Day

“Racing is a great mania to which one must sacrifice everything, without reticence, without hesitation.”

— Enzo Ferrari

What Else We’re Into

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You can also read our archive of past Intrinsic Value breakdowns, in case you’ve missed any, here — we’ve covered companies ranging from Alphabet to FICO, Transdigm, Lululemon, PayPal, DoorDash, Crocs, LVMH, Uber, and more!

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