Resilience Series Part 7: Hal Trust
Resilience Series Part 7: Hal Trust
Studying Edelweiss Holdings to learn more about resilience
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HAL Trust
So far in this series, we’ve covered:
French barrel-maker, TFF Group
Biscoff famous, Lotus Bakeries
Faroe Island fisheries, Bakkafrost
Swiss plastic creator, EMS-Chemie
French plant extractor, Robertet
Swiss dairy, Emmi Group
Now let’s talk about HAL Trust.
Background
You may have noticed that the HAL Trust logo is a flag with the letters “NASM”. That doesn’t spell HAL! No, it most certainly doesn’t. It stands for – “Nederlandsch-Amerikaansche Stoomvaart-Maatschappij” which can be translated to Dutch-America Steamship Company. Another name for this is Holland America Line, where HAL comes from. The original shipping business was started around 1873 in Rotterdam, Netherlands. It then expanded into passenger vessels as well. The history takes a turn in 1989, when it got acquired by Carnival Cruise Lines. In fact, the original business still stands today.
The Holland America Line business has a storied history. Its maiden voyage was actually a year before incorporation when the Rotterdam sailed from, you guessed it, Rotterdam, to Hoboken, New York. It’s estimated that in the first 25 years of service, HAL carried 400,000 emigrants to the US. If you’d like to read about all the details, you can do so here.
In 1989, Carnival bought Holland America line for $625 million and HAL trust was formed to manage the proceeds.
The Business
Nowadays, the trust’s assets are well diversified. The investment company is active in real estate, mainly in the Seattle area, and it owns three shopping malls in the Netherlands. It also owns a lot of short term bonds and cash. But primarily, the value lies in the businesses it owns and public stocks.
The most valuable business is Boskalis, which HAL owns completely, having taken it private in late 2022. Boskalis is a dredging and maritime services company. It owns 600 specialized vessels that do all sorts of things from creating ports, to installing offshore windmills, to setting up storm barriers, to salvaging shipwrecks, and most things in between. Boskalis is a very unique business and HAL trust has had an ownership stake for nearly 35 years, before officially owning it completely. Boskalis did $3.7 billion in revenue and more than $250 million in net income last year.
I could go into all of the individual businesses, but I’m not sure how interesting that would be. So I’ll list out all of them, ordered by HAL’s ownership stakes, and then we can briefly discuss some of the more interesting ones.
Boskalis (maritime services): 100% ($3.7 billion in sales)
IQIP (offshore wind): 100% ($107 million in sales)
RyK (optical chain): 100% ($57 million in sales)
FD Mediagroep (financial newspaper) : 98% ($119 million in sales)
Broadview (conglomerate): 97% ($1.4 billion in sales)
Koninklijke Ahrend (furniture): 96% ($337 million in sales)
TABS (timber and building supplies): 94% ($1.1 billion in sales)
AN Direct (hearing aids): 90% ($25 million in sales)
Van Wijnen (residential construction): 88% ($1.3 billion in sales)
HR Top (HR benchmarking): 87% ($37 million in sales)
Atlas Professionals (temporary staffing) : 87% ($193 million in sales)
GreenV (greenhouse construction): 71% ($189 million in sales)
Pro Gamers (gaming equipment) : 64% ($475 million in sales)
Anthony Veder (shipping): 63% ($257 million in sales)
Auxilium (medical aid): 57% ($313 million in sales)
Safilo (eyewear): 50% ($1.1 billion in sales)
Coolblue (e-commerce): 49% ($2.5 billion in sales)
Koninklijke Vopak (tank storage): 48% ($1.4 billion in sales)
Prodrive (electronics for semiconductors): 47% ($436 million in sales)
DMF (mortgages): 24% ($74 million in sales)
SBM Offshore (renewable energy): 23% ($3.2 billion in sales)
Phew! That was a lot!
The companies in bold are actually public companies that we can dig into further. The one I want to discuss is Safilo because HAL has had a history of success with eyewear companies. In 2021, it sold its crown jewel, GrandVision, to EssilorLuxottica for $5.7 billion, netting $3.7 billion for itself. That’s quite impressive for a trust that started out with $675 million nearly 35 years ago. A single sale yielding more than 5x the initial investment amount. If you’ve never heard of Luxottica, they basically have a monopoly on the eyewear industry as they’re completely vertically integrated. They manufacture glasses and distribute them. Some of their brands include Oakley, Ray-Ban, Arnette, LensCrafters, and Sunglass Hut. One crazy story is Luxxotica’s $2.1 billion acquisition of Oakley. Luxxotica, mainly through its Sunglass Hut stores, wanted to pay Oakley lower wholesale prices but Oakley refused. So Sunglass Hut dropped Oakley as a brand, and the company’s stock price fell nearly 40% over several months. Then, Luxxotica forced a hostile takeover. Now, that’s just unfair! But Luxxotica got its way. Since it owns the entire value chain and has few competitors, it is able to charge extremely high prices. And a couple years ago, they added HAL’s GrandVision, which owned several popular eyewear brands and stores in Europe.
HAL had owned a rather large stake in GrandVision for 25 years before selling it to EssilorLuxxotica. At one point, GrandVision accounted for a third of HAL’s net asset value. So management thought it made sense to finally sell it at a fair price to diversify. Through its GrandVision stores, HAL noticed a strong brand, Safilo, based in Milan. In 2005, they took a large stake in the public company and therefore, still have some exposure to the eyewear market.
The company has also had a lot of success in shipping businesses, like Boskalis, since shipping is part of the original HAL DNA. But the real secret is the company’s long-term mindset. The original family is still involved. During the Great Depression, Willem Van Der Vorm rescued the Holland American Line out of bankruptcy. And three generations later, Martjin Van Der Vorm is still the Chairman of the Supervisory Board, having stepped down as the overall Chairman about a decade ago. As all of the assets are internal resources, the company is able to make long-term bets on businesses, like holding Boskalis for nearly 40 years. You just don’t see that type of long-term orientation very often. But what’s also interesting is that the Van Der Vorm’s are so secretive. You really can’t find out a whole lot about them. Their ownership stakes are held in bearer shares, which allow them to obfuscate their identities. Even in the annual report, only the initials are used for the names of the family members. The shareholder materials aren’t overly narrative-based, but rather the nearly 200 pages mostly consist of the business facts and associated financial statements.
It’s sort of refreshing to see a family be so secretive about their wealth. I think this is a huge indicator of the family’s relationship with money and the likelihood that it will be preserved for generations. If you were to see the kids spending frivolously, you may worry about the longevity of the business. But the fact that HAL Trust has built such a solid team around its investment company and the original family is still heavily involved, is a great sign. Its long-term mindset and vast diversification are two foundational components of why it is so resilient.
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