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Slow has all the power: why we invest alongside long-term owners
Some of Asia’s highest-quality companies have independently developed similar characteristics. By focusing on their customers and prioritising financial resilience over short-term profits, their long-term owners have built businesses designed to thrive for decades.
- Many of the companies in Stewart Investors’ Asian portfolios have a ‘long-term owner’: a family, a founder or a foundation.
- By thinking in generational terms, long-term stewards are able to defy short-termism and build enduring franchises.
- Companies led by families and founders have tended to outperform over the long term.
“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently…while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.”
Apple ‘Think Different’ campaign, 1997.
Over 80% of the companies in Stewart Investors’ Asian portfolios currently have a long-term owner1. And, where that isn’t the case, we look for companies whose culture exemplifies an owner’s mindset. We tend to invest in companies with this model because they often demonstrate an increasingly rare superpower: the ability to think and act for the long term.
Apple’s Think Different campaign in the late 90’s celebrated the ‘crazy ones’ – unconventional thinkers such as Einstein, Edison, Picasso, Ali, and Earhart. In today’s corporate world, where time horizons are measured in quarters, the crazy ones are those thinking in decades or even in generations. In our portfolios, we would point to the likes of the Murugappa family, the Zóbel de Ayala family, Alex Hsieh, and the Tata family. These are wonderful long-term stewards who defy short-termism, who have built enduring franchises and who have, in the process, delivered positive compound returns to our clients.
At Stewart Investors, we have always sought to occupy a space that protects our clients’ capital. One of the threats we are striving to protect it from is short-termism: from the incessant distraction provided by 24-hour news, from the temptation to digest every morsel of noise, from the danger of trying to react to every macro data point or tweet, and from the pressure to fixate on quarterly earnings. That’s increasingly important in a world where long-term thinking is in increasingly short supply. Investment banks compile data-heavy reports that stretch to a hundred pages or more – but which often contain just one or two paragraphs on the people behind a business. Their clients simply don’t value that information. But we do.
Many long-term stewards have independently arrived at similar strategies and behaviours
In biology, the idea of ‘convergent evolution’ describes the process whereby unrelated species from opposite corners of the world develop similar traits to solve similar problems.
Birds and bats have both evolved wings.
Sharks (fish) and dolphins (mammals) have evolved similarly streamlined bodies.
Octopuses and humans have developed eyes with similar structures.
We can see a similar convergence between behaviours in the business world. Across different geographies and industries – an industrial company in India, a bank in the Philippines, a healthcare company in Japan – companies overseen by long-term stewards have independently arrived at remarkably similar strategies and behaviours that allow them to survive and create value in an unpredictable, increasingly short-term world.
Those behaviours include:
- Earning and retaining the trust of their customers rather than pursuing transactions.
- Aiming to solve problems rather than merely chasing profits.
- Prioritising discipline in their balance sheets.
- Seeing resilience not as a defensive strategy but as the foundation of long-term compound returns.
- Investing counter-cyclically.
- Preferring political neutrality to political favour.
These behaviours are typically built through decades of trial and error. Many of our businesses bear the scar tissue they formed through the Asian financial crisis in 1997, through military coups and political transitions, and through every type of inflation and interest-rate regime imaginable. Each experience incrementally honed their adaptability. When we invest in a company, we are not simply buying what it is today. We are investing behind the behaviours and decisions that it will take in the future, particularly in moments of stress.
During covid, for example, many of our companies refrained from cutting their workforces or slashing their R&D budgets simply to hit pre-pandemic earnings guidance. They saw the opportunity to invest countercyclically at the expense of peers who focus on the short term. Ultimately, they emerged from the pandemic stronger, with deeper commitment from their employees and with the loyalty of their customers enhanced. What does that long-termism mean for their shareholders?
Long-term stewards have delivered exceptional outcomes
Companies with long-term owners have produced demonstrably superior long-term returns for their shareholders. In The Founders Mentality, Chris Zook and James Allen, two researchers at Bain & Company, showed that, from 1990 to 2014, companies whose founders exercise enduring influence on them, whether as their leaders, on their boards, or in shaping their culture, excelled at maintaining profitable growth for the long term.2
A study by Steven Wood shows that over the past 30 years, owner-led businesses have delivered 10.9% annual returns, compared to 6.3% for the broader market, compounding to 17x outperformance3, as shown on the graph below.
From 2006 to 2022, Credit Suisse measured the performance of around a thousand publicly listed, family-owned companies, which it defined as listed businesses where the founder or their family owns at least 20% of the share capital or controls 20% of its voting rights4. Over that period, the companies in its ‘Family 1000 Universe’ generated an annual sector-adjusted excess return of 300 basis points relative to their non-family-owned peers.
The same study also showed that these businesses tended to grow their revenues more quickly than non-family-owned peers while enjoying higher margins and higher returns on capital. Interestingly, while that outperformance was consistent across all regions, roughly half of the family-owned companies in Credit Suisse’s dataset were located in Asia, making it a particularly fertile hunting ground for us.
We are looking not simply for long-term owners but for GREAT long-term owners
We don’t, of course, simply invest in a list of companies with long-term owners and hope that results in a portfolio with the characteristics we seek. Quite the opposite. We start by looking for the behaviours that suggest a company has a long-term mindset. It is striking, however, how often that leads us to companies with a long-term owner or to family-owned businesses.
Time horizons drive behaviours, and behaviours drive outcomes. Rather than the maximisation of short-term outcomes, it is our experience that long-term owners and founders understand that slow has all the power and so are optimised for long-term success.
Doug Ledingham
19 September 2025
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