Value Creation

Our Operating Framework and How It Creates Value

E3 Holding aims to be a strategic management holding and financial investor that follows an industry-specific and interactive management approach to take its investments to the next level.

Andrés Gevert von der E3 Holding G

Corporate structure typology

Management
  • Strategic
  • Group
  • Financial
  • Operational
Group parent
1
Operational investor
2
Financial investor
3
Holding company
4
Strategic management holding and financial investor
5
Own operational business
  • 1Group parent
  • 2Operational investor
  • 3Financial investor
  • 4Holding company
  • 5Strategic management holding and financial investor

A strategic management holding and financial investor is more than just an asset manager and financial backer of its portfolio. Working closely with the companies it invests in, it plays an active strategic role in how these companies perform. Since E3 is still a relatively young industrial holding company, it is only natural that we are thinking about how to allocate tasks between the investor and the investees, both in terms of structures and processes.

A strategic management holding and financial investor plays an active strategic role in how its group companies perform.

Whilst E3 is largely responsible for normative as well as value-driven and interactive tasks, it is up to the investees to implement their corporate strategies and run their operations. Portfolio management is not just about managing valuable investments – it is also about generating extra value from the combination of investments held in the investor’s portfolio.

The elements of good portfolio management

Normative tasks
Creation of a corporate philosophy and group development
  • Determining the corporate philosophy
  • Determining tasks and resources of the parent company (activity group)
  • Developing the investment portfolio
  • Determining the investment strategy
Activation & reinforcement
  • Setting goals: unilaterally or jointly
  • Encouraging innovation
  • Intervening: assessing strategic and operational alternatives, making decisions, instructing implementation, enforcing decisions taken
  • Mentoring: listening, thinking, encouraging, opening doors, providing resources, informing, giving advice, reassuring
  • Counselling: on factual and personal topics, offering resources
  • Shaping the corporate culture: setting an example for, and participating in, a common corporate culture
  • Creating communication forums
  • Regular communication and/or moderation
  • Realising synergies
  • Providing cross-divisional functions
  • Shaping the corporate culture: setting an example for, and participating in, a common corporate culture
  • Reviewing target achievement
  • Deviation analysis, validating causes
  • Searching for solutions and course of action (suggestions)
  • Assessing the situation and measures (e.g. investments, financial plans, …)

The operating framework governs how the investor and its investees work together.

E3 Holding aims for a collaborative partnership with its investees. The principles, core processes and guidelines documented in the operating framework guide E3 Holding’s executives, employees, shareholders and business partners – as well as those of its investees – as to how the companies are managed.

Basic structure & distribution of tasks

Basic structure of a strategic investor and distribution of tasks between investor and investee

Responsibility: strategic investor
  • Vision/
mission of the investor/group
  • Foresight / 
environmental forecasts
  • Strategic controlling
  • Group values & mission statement
  • Group management
  • Financing/
debt
  • Corporate strategy
  • New investments
  • Governance rules
  • Network of Excellence (management/
administration)
  • Strategic development of goals
  • Advisory Board relations
  • Communication
Top-down/
bottom-up
Discourse & alignment
  • Innovation strategy / development of innovations
  • Methods / qualification / in-house consulting
  • Financial planning
  • Budget planning
  • KPIs/scorecard (setting)
  • IT strategy
  • IT systems
  • ESG
  • Business development
  • Corporate identity / brand development
    Responsibility: investee
    • Vision/mission of the investee
    • Implementation of values / mission statement
    • Sales
    • Operational strategy / production
    • Operational controlling
    • Direct purchasing of materials
    • Indirect purchasing of materials
    • Reporting
    • Investment purchasing
    • Operational investments (planning/implementation)
    • HR administration
    • Business strategy
    • Accounting / taxes

    This structure will also reveal the company’s organisational maturity. It is crucial that parameters and guidelines are defined early on, especially for companies that are still at an early stage of their development; focus on core business is key. The more the company grows, the more effort is required to implement and internalise the framework.

    It is crucial that parameters and guidelines are defined early on!