Why you should invest in holding companies

Written by Access Industries

Searching for Blavatnik Entrepreneur or Blavatnik Bio about who Len Blavatnik is and why he is relevant to business in the twenty first century will show you how this individual was able to create a multinational company that has holdings in North America, South America, and Europe as well. He was able to do this by making a holding company whose purpose is to own and acquire other businesses or shares of stock thereof. Essentially, that’s what a holding company does. It’s a company or a corporation that’s formed in order to hold assets. And that’s why it’s called a holding company. So why should you invest in companies like these? If you think about it, you should invest in holding companies because you are practically investing one corporation but you, in effect, indirectly own in a derivative capacity all the other corporations held by it. Think of it as buying and planting your very own fruit-bearing tree. If you own the tree, then that would also mean that you own all of the fruit that it bears as well. In a sense, that’s how you can describe a holding company. Why own the fruit when you can own the tree that bears the fruit right? If you get to own majority of the voting stock, or at least if you own a significant bloc of voting shares in the holding corporation, you get to nominate your own board member, who in turn would be able to control their subsidiary corporations in a fixed capacity.

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Len Blavatnik is a philanthropist and an entrepreneur. We all could learn a thing or two by emulating his work ethic.