It is rarely a good look for a listed company to buy a minority stake in another, however glamorous the target’s prospects may be. There is no reason why a company should be better than its shareholders at stockpicking, and investors should be free to make their own mistakes.

Corporate finance orthodoxy doesn’t necessarily dissuade executives from having a go. Witness the web of interlocking stakes that US tech companies have woven with impunity, including Nvidia’s investments in OpenAI and Intel. And sometimes there are genuine reasons why tying up capital in this way creates value.

L’Oréal, which this week doubled its stake in Swiss skincare company Galderma to 20 per cent — a shareholding worth SFr8bn ($10bn) at current market value — provides an example. Neither of the two reasons the French company posits for its investment is watertight, but there is an unmentioned third that would make the whole thing worthwhile.