The appeal of investing in family-owned companies

Recently published research from Credit Suisse concluded family-owned companies provide superior growth and returns. As managers of the British Empire Trust, which has over a third of its NAV invested in family-backed holding companies across Europe, Asia, and South America, we would agree.

In a market fixated by quarterly guidance and 'making the numbers', it is the longer-term investment horizon of the families that allows them to make investments for the future, often at the expense of short-term profitability.  An added attraction that of these companies is they typically trade at material discounts to the value of their underlying investments. One example of such a company is EXOR, the Italian-listed holding company controlled by the Agnelli family that can trace its roots back to 1899. WisdomTree's Gannatti: European equities still attractive despite Italy risk ...