EDM maintains its growth strategy after the entry of Mutua Madrileña into its shareholding six years ago. The firm founded by Eusebio Díaz-Morera in 1989 has grown by 10% in assets under management this year, reaching 4,480 million eurosclose to the goal of reaching 5,700 million in three years, with 4,436 clients, of which 91% are individual investors, largely family business groups. “Historically we have grown at rates of 15% annually, but achieving 10% today is good, because the environment is not the same in terms of interest rates and competition,” explained Carlos Llamas, CEO of EDM, during a meeting with the media to take stock of 2024.
Llamas explained that, within the segment of wealth management, Almost 70% of the assets managed by the firm are in discretionary portfolio management and 8% in advisory. “We like to say that we are a variable income house, although in recent years there has been a shift, logically, to fixed income, with 9% in monetary products and 31% in debt funds,” said Llamas, who highlighted as their clients “are quite loyal” since “they understand our investment style well and the results are consistent, because in difficult market times, knowing the difference between value and price is a peace of mind.”
The boutique investment company, of which Mutua already has 84.4% of the shares, has a large part of its portfolio invested in its own funds, which bring together 81.5% of the assets, a percentage that the firm plans to reduce until third-party funds reach 30%. Besides, The strategy also involves attracting more institutional clientsa segment where they now have insurance companies and some eafis for the distribution of their products.
The firm, which has 60% of its business from Catalan clients, reiterated its geographic expansion plans beyond where they now have a presence, Madrid and Barcelona. Specifically, in Valencia, initially by hiring agents.
Besides, They want to strengthen the institutional segment, expanding the team and the product offeringwith tailor-made vehicles, such as maturity funds or through management mandates. Their plans also include the distribution of more illiquid alternative products. “We define ourselves as a house of listed assets, but we are not oblivious to the fact that in the world of unlisted assets there may be opportunities. And it can add value to portfolios,” said Llamas.
In fact, the firm has already distributed some alternative funds on time, such as Mutua’s venture capital fund or MCH’s infrastructure fund.
“The good thing about these 35 years is that you can see the track records historical profitability. And we report every month on the profitability of both the assets and the portfolios over the last ten years,” stressed the head of EDM.
The new compass
Like other independent firms, at EDM they like to highlight that the selection of securities in the portfolio is due to a systematic investment process for the selection of securities, where they take into account that they are leading companies in their sector and global to compose a portfolio of 80 low rotation values.
Eusebio Díaz-Morera, founder of the firm, explained the firm’s new investment compass for the next four years, a stage characterized by structural inflation and higher interest rateswith greater public debt and strong investments to undertake the energy transition, with increased geopolitical risks, more political and social instability and growing state interventionism.
In this sense, the firm is betting on values such as Nvidia, ASML, Microsoft and SAP for the part of the portfolio they dedicate to innovation and digitalization companies; Novo Nordisk, Intuitive and Essilor Luxottica (health and structural aging); LVMH, Inditex and LÓreal (emerging middle classes); Airbus, Safran and Assa Abloy (industries with structural growth); Linde, Schneider Electric and Iberdrola, for the energy transition part; and DSV, Meituan and Uber in e-commerce and mobility.
“Our work is more psychological because we have to calm clients’ anxiety,” summarized Díaz-Morera, who has just published a manual that tries to synthesize EDM’s investment philosophy and strategy. “We are more managers than bankers. We offer conviction and harmony with investors, which generates very strong trust,” said the founder.
The book began as a “balsamic document” for the firm’s clients, after the crisis of the dotcoma moment in which they learned that, “even if a company is a good business, if you incur a valuation risk… Cisco has taken 30 years to recover,” Díaz-Morera stressed.
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