Family businesses play an essential role in our economy. From very small businesses to multinationals listed on the stock exchange, they create sustainable jobs. However, defining this type of structure is not an easy task. The share of subjectivity is high and our legal systems often do not make the difference with a non-family business. Broadly speaking, we will retain that a family business is one that is owned by its founder or his heirs either through direct shareholding or by holding voting rights without a minimum threshold, the main thing being that the family has the power to appoint and dismiss managers. Analysts at Credit Suisse Research Institute concluded in 2018 that family businesses outperform stock markets as a whole. Let's take a brief look at the key success factors for family businesses.
Within this investment theme, it is possible to identify several characteristics common to family businesses:
- A culture of entrepreneurship, enabling family businesses to achieve robust growth and better financial results.
- Prudent management of financial resources. The company's capital represents an important part of the family patrimony, and managers tend to demonstrate operational activism and often manage their assets with the utmost rigor.
- A long-term vision of the business. The family also invests with a view to ensuring the transmission of capital to the next generation. Adopting a long-term vision also means building employee loyalty through greater recognition.
The strategic choices made by founding shareholders are therefore driven by a long-term structural vision, a guarantee of the company's longevity.
In Europe, the pool of these family businesses is vast. Euronext has more than 240 family-owned companies listed in Paris, Amsterdam, Brussels and Lisbon with a total capitalization of €1,200 billion. In April 2016, the market operator launched the Family Business index, which initially included 90 stocks from all market capitalizations. It has gone further by creating the Family Share program, which aims to support family businesses in their financing strategy.
If you think that this theme is profitable for the investor, you will find below a list of the European Family Business that we offer you, all sectors combined. Out of an initial list of 220 stocks, we have only selected capitalizations above €1 billion in order to ensure a good level of liquidity for the investor.
On the podium of countries represented, we find France (38%), Switzerland (20%) and finally Germany with 19%, including Biomérieux, Dassault, Bouygues, AB inBev, Heineken, Volkswagen, Banco Santander, La Compagnie Financière Richemont and many others.