Calling First Eagle Funds an “overlooked manager” is a bit like calling Warren Buffett poor or Bill Gross pedestrian; it just doesn’t fit. But 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, 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 Investment Advisor, along with the firm’s interest in Japan (post-natural disaster, as well as long before) and why alpha is simply a Greek letter.
“We view ourselves as a firm of investors, not asset gatherers,” Arnhold says, which is reflected on First Eagle’s website, in its literature and anywhere else a prospect or client might look. “As such, our interests are closely aligned with those of our clients. We measure our success by the same standard: consistently strong long-term performance.”
As the firm notes, “First Eagle strives at all times to preserve the high standards we have maintained over our 200-year history: a record of unquestioned integrity, a work environment that fosters excellence and dedication, and the earned respect of our clients and peers. This includes a commitment to value investing, patience to hold companies for the long term, a focus on preserving our clients’ capital over time and being benchmark-agnostic managers undeterred by market consensus or short-term sentiment.”
John Sullivan: 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?
John Arnhold: Our predecessor’s name was Arnhold and S. Bleichroeder, which was a firm that traced 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.
JS: And today?