Capital Allocation: Principles, Strategies, and Processes for Creating Long-Term Shareholder Value - Hardcover

Giroux

Hardcover

ISBN 10: 1264270062 ISBN 13: 9781264270064

Publisher: McGraw Hill, 2021

Synopsis

Seize the competitive edge through intelligent, differentiated capital allocation

The intelligent deployment of capital is one of the most effective ways to create long-term value. But despite this, there are very few capital allocation experts on the boards of the largest publicly traded companies, and academic research consistently finds that most firms deploy capital sub-optimally.

Capital Allocation aims to educate senior leaders, board members, investors, students, and anyone interested in business on this important topic. Until now very little has been written on capital allocation outside of academia, even though the strategic deployment of excess capital is an increasingly significant source of competitive advantage for many companies.

David Giroux, Chief Investment Officer for Equities and Multi-Asset and Head of Investment Strategy at T. Rowe Price, covers the entire gamut of capital allocation issues, including optimal capital structure, capital allocation alternatives, mergers & acquisitions, and special situations. Capital Allocation walks you through this critical topic from beginning to end, including:

• Stories of companies that allocated capital in ways that created significant shareholder value
• Several real-life decision-making models you can use for strategically allocating your firm’s capital
• Guidelines for generating high returns in the long term to build sustainable shareholder wealth

Giroux uses academic research, personal experience, and uncomplicated mathematics to reveal approaches and actions that create long-term value. He provides case studies from Kodak, Comcast, Thermo Fisher Scientific, Danaher, General Electric, Microsoft, and others showing how capital allocation has―and hasn’t―worked in real-life situations. And he shows how to use capital allocation to head off possible activist investors.

Capital Allocation offers everything you need to know for deploying capital wisely to outperform your competitors over the long term.

About this title

About the Author

David R. Giroux is Chief Investment Officer for Equities and Multi-Asset at T. Rowe Price. He also serves as Head of Investment Strategy and Portfolio Manager for the Capital Appreciation Fund, which has been ranked in the top one percentile in both Morningstar and Lipper peer rankings. A Chartered Financial Analyst, Giroux is a two-time winner and five-time nominee for Morningstar Manager of the Year, and a 13-time winner of Lipper’s Best Fund in Category award. In 2005, he was named Best of the Buy Side Capital Goods/Industrials winner by Institutional Investor.

From the Back Cover

"This portfolio manager belongs on the Mount Rushmore of the greatest investors of the decade."
—Leo Acheson, Morningstar Director of Multi-Asset Ratings

"Capital allocation is not always considered as an equal to business, operational, and people strategies even though it represents at least as much sustained economic opportunity. David Giroux takes his experiences as one of the best investors in the market and converts those insights into a veritable owner's manual to value creation through capital. By doing so, he provides a simple roadmap for management and boards to test the efficacy of their capital strategies—and deliver best-in-class returns for their stakeholders."
—Jeff Yabuki, former CEO, Fiserv, Inc. 

"Capital Allocation brings new important insights to management teams and Boards of Directors. A thoroughly researched and insightful book that gives practical frameworks on how a business can navigate making appropriate capital allocation decisions. David Giroux’s deep credibility makes this book an invaluable resource."
—Marc N. Casper, Chairman, President, and CEO, Thermo Fisher Scientific

"David Giroux is an astute investor focused on understanding management’s strategic vision and assessing their ability to turn words into action. His deep investment experience, spanning decades of alpha generation, and his passion for rigorous analysis underpin his work. His book provides valuable insights and guidance for both investors and business leaders."
—Dan Glaser, President and CEO, Marsh McLennan

"David Giroux, a leading portfolio manager with long-standing best-in-class performance, delivers again with an impactful work on capital allocation. By pairing clear concepts and connected real-world case studies, Giroux aims to fill the void that exists between academic theories and business press headlines. He challenges some conventional notions and provides a comprehensive framework for companies and Boards to think about capital allocation. All of it, but in particular his chapters on acquisitions, should be required reading for Boards, management teams, investment professionals and students of business."
—Daniel Comas, former CFO, Danaher Corporation; Adjunct Professor, Georgetown University

"Most important decisions boards and CEOs make to deliver long-term value are: Right CEO selection and talent, capital allocation, risk management, and assuring the right culture. This is the best book I have read on all aspects of capital allocation with real-life examples as well as actionable recommendations, including how to measure the impact of decisions. I certainly learned a great deal and highly recommend Capital Allocation to both private and public company CEOs and Boards.”
—Raj Gupta, Chairman Aptiv PLC and Avantor Inc.; former CEO of Rohm and Haas Company; and former Board member of Vanguard Group, DuPont, HP, and Tyco

"One of the leading investors of his generation, David Giroux highlights the critical role of capital allocation to corporate success. His readable and insightful stories about real companies will help you understand why some companies thrive and others falter. This is a high ROI book!"
—William J. Stromberg, CEO and Chairman, T. Rowe Price

Edition details

• Publisher: McGraw Hill
• Publication date: 2021
• ISBN 10: 1264270062
• ISBN 13: 9781264270064
• Binding: Hardcover
• Language: English
• Number of pages: 480