Pictet Asset Management has launched a Luxembourg-domiciled UCITS fund that invests in family-owned businesses and will aim to outperform the broader global equity market.
The Pictet Family fund will be co-managed by Geneva-based Alain Caffort and Cyril Benier, who will invest in listed businesses where a founder or family holds at least 30% of the voting rights, which will leave them with a global investable universe of approximately 500 companies.
According to the firm's research, family-owned enterprises are typically more profitable for long-term investors than their peers due to strong values, active ownership and a "heightened long-term focus combined with succession planning".
Caffort said: "There is a strong cultural fit between Pictet and the strategy. Not only is the Pictet Group a family owned business, but the culture of our firm represents many of the characteristics that we look for in companies when investing.
"Despite the fact that founder or family-controlled companies represent almost 20% of the MSCI ACWI index, we found that there were very few investment approaches giving investors the opportunity to capitalise on the prominence and strengths of family businesses - especially within a global equity strategy. The Pictet Family fund aims to fill that void."
The fund will look to harness four key dynamics typically at play within family-owned businesses: entrepreneurship, which is often exercised through disruption or innovation; careful stewardship to ensure success for the next generation; ‘skin in the game' and therefore "socio-emotional wealth"; and a longer term perspective which typically leads to reinvesting for growth, according to the firm.