As part of our broad Christian mission, we follow a triangular strategy composed of a corporate strategy, a religious strategy and a political strategy. While these three strategies actually constitute a single integrated strategy, we make it a point to keep religion, politics and business strictly separated. As such we do not do things such as advocating for a political agenda through one of our businesses, even though at a higher level our various platforms fit into a single integrated strategy as explained in the rest of this page.
As a closely-held family-owned organization, the Bonita Foundation is a long-term player. While we are proficient at delivering fast-paced business value for our clients and partners needing to meet market timelines, as far as our own organization is concerned, our overall focus is not on business quarters but on family generations.
We have three goals for every generation of the family (1) identifying the unique vision and calling that God has for this generation, (2) ensuring that the generation fulfills this God-given mission toward markets, communities and the Church, and (3) ensuring that the generation passes more equity to the next generation than it has received from the previous generation.
We have two parallel strategies to help us materialize these goals: one long-term strategy having a 50-year outlook and one short-term strategy having a 10-year outlook. And in addition to these two group-wide high-level strategies, each of our companies also has a 5-year operational strategy defined in partnership with the foundation.
Our long-term strategy provides us focus and describes the point where we want to be 50-years from now and how we want the world to look like as a result of our impact. But in addition to defining the specific outcomes we want to achieve, the long-term strategy also defines the steps that we will follow to achieve these results. This means that the 50-year strategy defines in advance the five 10-year strategies that will need to be followed.
While we sometimes communicate on certain aspects of our 10-year strategies, our long-term strategy is a well-kept family secret and is often the source of much curiosity and speculation.
Our short-term 10-year strategies provide us operational focus as we operate both our commercial and non-commercial organizations. Then the 5-year strategies specific to each organization (and developed in partnership with their senior management) connect our 10-year strategic vision with practical operational realities.
In terms of portfolio, as a general rule, the Bonita Foundation is not involved in any form of real estate speculation. While real estate is a common investment and hedging strategy, we choose not to use real estate interests as part of our asset management strategy for religious reasons. We totally respect asset managers fulfilling their fiduciary duty towards their clients by dealing with the world as it exists today and not as their wished it was, we are therefore not saying this to judge anyone.
However as far as we are concerned, we consider that gentrification, rent increases and property taxes are both robbing and oppressing the poor by constantly removing the ground from under their feet. We therefore do our part by not participating in this system to the largest extent we are able to. We particularly hate gentrification as it robs people from the equity they have built through their very existence and their very life. Gentrification robs the substantial equity that people create by living and existing somewhere while this equity is the only equity that a poor person has: the way they have raised their children and helped their neighbors to create a high quality community. We think that the dynamics of gentrification are largely a measure of the way a nation perceives human value.
We think that governments should recognize the vast intangible equity created by the fact of living in a place peacefully. We think that the extent to which a nation recognizes this equity determines the overall justice and quality of this nation. We therefore hope that one day, selling a residential unit for more than construction cost will not be allowed except in specially designated areas. And similarly, we hope that renting residential units will not be allowed because people should never be robbed of the equity they create and that the equity built by existing peacefully in a home should prevail over any other type of equity. We think that people should be able to enjoy the equity of the communities they have built as their inheritance instead of being priced out of their neighborhoods and robbed of this equity.
Speculators should focus on commercial real estate to speculate, and entrepreneurs passionate about building should explore alternative business models, such as selling exclusivity licenses to retailers to allow them to service the people living in their buildings. People needing to stay in a city for a few months only can stay in a hotel (like they used to do decades ago). In a sound system, the market would be incentivized to build new neighborhoods around attractive areas instead of being given the tools to progressively gentrify. In a sound system, the housing market should be such that people are able to build a brand new home for the equivalent of 1 to 3 years of salary considering the pivotal role of housing in life and society. In such a sound system, the overall society would doubly benefit as asset managers would have to exclusively deploy capital on productive positions instead of keeping capital idle in real estate at an excessive degree.
From a different perspective, while it is totally understandable for a sovereign fund having 1 trillion in assets to hedge some of it using real estate, we want our future family members to be productive members of society being able to add value to the life of millions through entrepreneurship. We value entrepreneurship as entrepreneurship requires caring deeply about people in order to understand how to help them, how to serve them and how to persuade them. By contrast buying a residential building, increasing the rent by 10% and reselling the building for twice the acquisition price a few years later creates equity for a very small group of people at the cost of destroying vast value for communities and the overall public who hereby see their purchasing power and the value of their savings reduced while no actual value has been created for them.
For the value they have created is literally siphoned out from them as only high net-worth players are able to access financing – after having driven the market up using once again their privileged access to financing to speculate (no poor person will ever be granted financing for a multi-million dollars deal).
Therefore, as a family and as an organization, staying clear of all forms of real estate speculation also allows us to train generations of high-quality entrepreneurs focused on wisdom, love for others and value creation. This policy helps us keep our members focused on God’s justice and value creation.
When we have real estate positions, it is always to support a business infrastructure for our companies and not to hedge a portfolio. Even when we need to have third party sellers in a building, we seek a percentage on their revenue and similar forms of partnership rather than charging them a rent. To put it simply, even when we have real estate positions, we are not in the real estate business.
While hostile activism has become commonplace in this world whenever people do not appear to start from the same perspective, as far as we are concerned these are not methods we tolerate and, as matter of fact, we do not lobby against the residential real estate industry. On the opposite we build businesses supporting them to help them build a better world in a bottom up fashion, by opening their eyes to the many ways they can safely transition their business model while multiplying shareholder value and having the added benefit of protecting their business from the frequent fiscal and political disruptions that are commonplace nowadays. We work hard to help them, so much that we ironically often seem to be their strongest lobbyists. Following the example of the Lord Jesus-Christ, we make their problem our problems and come to them with compassion, humility and solutions rather than hostily, arrogance, and blame. And this is always the approach we follow: this is the Bonita Approach to building a better world, a Christian approach focused on setting stones instead of casting them.
We think differently than most people and do things very differently than most people, and this is one of the reasons we are able to see opportunities that most people are unable to see. Because while many people are unable to understand the merits of original points of view, we understand all point of views, both traditional ones, original ones and radical ones. This provides us a substantial market reading advantage as well as substantial innovation and value creation tools.
Finally, while we have positions in a wide array of industries, we are not pursuing a diversification strategy. On the opposite, we are following an integrated strategy as part of which we are involved in a variety of industries to better support our companies, affiliates and strategic partners. We therefore develop a deep expertise and a best-in-class operational infrastructure in each of the industries in which we are involved. For we are long-term players and are committed to our positions for the very long term. As such, while we have developed a wide array of positions over the years, these positions are very integrated both from a strategic perspective and from an operational perspective as they participate in our long-term vision.