How much do you really know about First Eagle Funds? Sure, it’s racked up fantastic performance and given us legendary investors like Jean-Marie Eveillard, but its history is just as fascinating, and the tradition in which it’s steeped is a big part of its success.
John Arnhold (left), First Eagle Investment Management’s chairman and CIO, is a scion of the family that started the firm in Dresden, Germany, in 1864. It’s quite a tale, and Arnhold took time to explain it to AdvisorOne, along with the firm’s interest in Japan (post-natural disaster as well as long before) and why alpha is simply a Greek letter.
Q: There’s much to be said for longevity. The firm got its start in 1864, but actually traces its roots back to 1803. Can you explain?
A: Our predecessor name was Arnhold and S. Bleichroeder, which is a firm that traces its history back to Germany where my family started its banking business in 1864. The Bleichroeder part of the firm was acquired in 1931, but it actually started in 1803. So we trace our history back over 200 years and we had a very successful bank in Dresden and Berlin. During the Nazi regime we were forced to sell the bank and, thankfully, the family fled the country. A number of family members came to the United States and began the business anew. During the subsequent decade my great granduncle focused the firm on the investment banking and global securities brokerage businesses.
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Q: And today?
A: Our only business today is our asset management business, which began in fund form in 1967. It was called First Eagle Funds N.V. and the name was derived from a bank that we had owned in Switzerland called Adler Bank. Adler is German for Eagle. The name Eagle Funds had already been taken in the United States, so used the name First Eagle. In 1987, we started our first mutual fund called First Eagle Fund of America. In 2002, we sold our investment banking and broker-dealer business to a large French bank. We think of ourselves as investment managers rather than asset gatherers. We focus on long-term capital preservation and preserving purchasing power overtime. And we serve over two million shareholders globally.