Love isn’t a topic that often crops up in the Investors’ Chronicle, but perhaps it should be. A growing body of evidence suggests that love – or at least family ties – makes companies better. Research published by Credit Suisse in March found that family businesses across the globe have generated an average excess return of three percentage points every year since 2006.
At the same time, faith in families is being tested. The performance of Credit Suisse’s Family 1000 index went into reverse in 2022, and a number of the world's biggest corporate dynasties are in the midst of succession planning. Meanwhile, there are hints that shareholders are becoming unhappy about the power yielded by gilded tribes.
Many businesses start as family affairs, one way or another, before investors get involved. But defining a listed family company isn't quite as straightforward as it may seem.