East 72 Dynasty Trust Reports Modest Q3 NAV Growth Amidst Diverse Portfolio Performance

East 72 Dynasty Trust Reports Modest Q3 NAV Growth

U.S. equities closed higher on Tuesday, with the East 72 Dynasty Trust reporting a modest 1.6% increase in its Net Asset Value (NAV) per unit during the September quarter of 2025, reaching $1.3335. This incremental growth comes against a backdrop of varied performance among its core holdings, which some analysts characterize as "value traps" due to persistent discounts to intrinsic value or significant market headwinds.

Key Holdings Face Divergent Pressures

Bolloré (OTCPK:BOIVF) shares have experienced a notable decline, falling 19.5% over the past year. This downturn is attributed to investor unease surrounding corporate governance and a significant pending legal dispute. The company faces a French Supreme Court appeal on November 25, 2025, concerning a mandated takeover offer for Vivendi (OTCPK:VVVNF) by the Autorité des Marchés Financiers (AMF). The AMF's July 2025 decision, upheld by the Paris Court of Appeal, stemmed from concerns that Bolloré's 2024 restructuring unfairly favored controlling shareholders. Analysts estimate a fair buyout price for Vivendi could reach €5 billion, which would unlock value for minority shareholders but impose significant compliance costs and potential reputational damage on Bolloré. The company has also suffered an estimated €1.2 billion "rating" decline over the past year, reflecting market impatience and structural complexities within entities like the Louis Hachette Group.

Exor (OTCPK:EXXRF), the Agnelli family's holding company, continues to trade at a substantial 53% discount to its NAV, despite a strong track record of capital management. For comparison, Porsche Automobil Holding SE currently trades at a 35% discount. Exor's management has actively addressed this disparity through shareholder-friendly actions, including a €1 billion share buyback program in H1 2025, repurchasing 1.28 million shares at an average price of €81.60 per share, approximately a 50% discount to NAV. The company has also strategically rebalanced its portfolio through divestments, such as the €3 billion sale of a 4% stake in Ferrari (RACE), while increasing its investment in Philips and diversifying into high-growth sectors. Exor's NAV per share increased by 0.9% to €178.78 as of December 2024, with a strong financial position including €4.1 billion in inflows from asset monetization and a low Loan-to-Value (LTV) ratio of 5.5%.

Swatch Group (OTCPK:SWGAY) has seen its shares plummet 55% from March 2023 highs, making it the second-largest short sale exposure in European equities. The luxury watchmaker is battling significant macroeconomic headwinds, including collapsing Chinese consumer demand, a strong Swiss Franc, and 39% U.S. tariffs on Swiss watches. In the first half of 2025, net sales decreased by 7.1% at constant exchange rates, with operating profit falling sharply to CHF 68 million from CHF 204 million in H1 2024. Swiss watch exports overall fell 17% in August, with China down 36% and the U.S. down 24%. Swatch Group has implemented tariff mitigation strategies, including price increases of 5-10% in the U.S. and a "creative protest" watch to highlight the tariff issue. The Hayek family, controlling 44% of voting rights, has resisted activist investor demands, signaling intent to maintain strategic direction.

Market Reaction and Broader Implications

The market's reaction to these developments underscores a preference for clarity and immediate returns. Bolloré's legal entanglements and complex corporate structures have fueled investor impatience, leading to a de-rating that transcends direct mark-to-market losses. For Exor, the persistent NAV discount, despite robust financial health and active capital management, suggests market skepticism regarding the valuation of its unlisted assets or a lack of patience for long-term strategic plays. The profound challenges facing Swatch Group highlight the fragility of the luxury sector amidst geopolitical tensions and shifts in consumer behavior, particularly in the crucial Chinese market. The company's strategic decisions, including its resistance to activist demands, reflect a long-term vision but have yet to assuage short-term market concerns, evidenced by significant short interest.

"The current 53% NAV discount [for Exor] vs. Porsche's 35% offers upside. This confirms our buy rating," notes Mare Evidence Lab, highlighting the intrinsic value potential.

Vontobel analyst Jean-Philippe Bertschy remarked on the Swiss watch industry, stating that the "broad-based downturn underscores the formidable headwinds the Swiss watch industry continues to face."

Looking Ahead

Investors will closely monitor the French Supreme Court's ruling on the Bolloré-AMF dispute on November 25, 2025, as its outcome will significantly influence Bolloré's strategic direction and broader European corporate governance standards. For Exor, continued strategic divestments and new investments, alongside ongoing share buybacks, are expected to narrow the NAV discount over time. Swatch Group anticipates improvements in the Chinese market in H2 2025, alongside continued growth in the USA, Japan, and India. The effectiveness of its product innovation and e-commerce expansion strategies, particularly a new AI-powered personalization concept for Swatch watches, will be key to its recovery. The luxury sector overall will face continued scrutiny regarding its resilience against global economic pressures and evolving consumer preferences.