The Cooperative acts as a holding company for the acquisition of shares in companies whose activities can have or have a positive impact on the environment. In this sense, the Cooperative is a company governed by articles 828 and following of the Code of Obligations. The said article 828 specifies that.
- A cooperative company is a company formed by a variable number of persons or commercial companies, organized corporately, and whose main purpose is to promote or guarantee, through joint action, the specific economic interests of its members.
- The formation of cooperative companies with predetermined capital is prohibited.
We are therefore not involved in an active management process such as that used for investments through investment funds, and a clear distinction must be made between equity investments in listed and non-listed companies. ONE CREATION’s social purpose underpins the long-term management of equity investments.
For listed companies, the focus is on economic entities that have demonstrated that over a given period, they have been able to generate stable to growing profits and that they are able to distribute a dividend and that their involvement in sustainable development, as measured by sales, will increase. There are no geographical or market capitalization restrictions, except that for reasons of risk management and the impact of stock market movements on assets and maintaining the long-term value of holdings, very strict criteria are applied to the monitoring and increase of holdings. Similarly, it is essential that the weight of each of the entities in the portfolio respects a relative ratio between the different holdings that is not dominant. A minimum level of 50% of the company’s assets at liquidation value is applied for this type of company. For unlisted companies, the Management targets entities at different stages of economic development. A reserve criterion is applied to the level of acquisition of each holding, i.e. a company that meets all the criteria of excellence may not exceed, at the time of acquisition, one-twentieth of the total corporate assets in liquidation value at the time of entry into the company. This implies that lower counter-values are applicable, which also diversifies the portfolio of holdings in unlisted companies. This also implies that ONE CREATION builds in its development of subsequent investment capacities in the same companies, depending on the arrival of new partners. For these companies, several highly diversified opportunities are under study and represent an extension of the economic sectors considered, as well as the number of equity investments, which reinforces the diversification of the total corporate assets and optimises the returns on investment.
As far as returns on investments are concerned, each investment has its own timetable for development, bearing in mind that the management is focusing on entities that will eventually generate dividends, without ruling out the possibility that some companies may be bought out or floated on the stock exchange, which will provide a significant improvement in the economic substance of the partners’ assets through their share(s).
At the request of the partners, certain criteria are put in place, including the level of latent reserves on listed securities, which must not exceed 25% of the share capital. Thus, each excess is adjusted and represents a potential for dividend payments, in addition to possible exits of holdings. Infrastructure remains a focus and projects may increasingly be considered as the share capital grows. Such investments offer a sensible diversification with a direct return and cash flow generation that optimizes current cash management.