Family businesses are often run with a more long-term view than companies run by changing managers.

This can also pay off for investors.

Because numerous family businesses are listed and are therefore also open to investors.

The fund company Conren, which was founded in 2005 as an asset management company for an entrepreneurial family, has therefore examined how larger listed family businesses from Europe got through the Corona crisis.

The authors of the study come to the conclusion that the share prices of European family businesses from April 2020 to June 2021 developed significantly better than the stock market as a whole. According to Conren, this also applies to a long-term comparison: the period from the financial market crisis to the corona crisis. from March 2009 to March 2020. The subject of the study was 955 European family businesses, each with a market capitalization of more than 200 million euros. In total, these companies from 34 countries had a market value of 5.1 trillion euros at the end of June. The broad European stock market index Stoxx Europe 600 with a market capitalization of 13.3 trillion euros was used as a benchmark. According to the Conren definition, family businesses are characterized by the fact that they are run by owner families,who are involved as anchor shareholders, for example, are permanently influenced.

Patience pays off

How do the experts explain the strong price development of such companies?

Of course, family businesses are also exposed to special risks, such as the generation change at the top or private conflicts between relatives.

But Conren sees owner-run companies at an advantage because they are not fixated on short-term quarterly results.

In medical technology, for example, investments are regularly required that only pay for themselves after seven, ten or even more years.

Most temporary managers could not cover such periods at all.

Even private equity investors with a holding period of around seven years did not make it.

Anyone who invests in family businesses must also give them the time they need to solve problems and take advantage of opportunities.

According to Conren, family businesses drive innovations in small but very numerous steps, which can give rise to major advantages over competitors over time.

The study illustrates this using the example of a manufacturer of medical technology products who revolutionized the manufacture of knee prostheses by changing the assembly of the casting devices.

This almost halved the need for valuable raw materials for production.

The study is not satisfied with such examples, but also tries to quantify the advantages of family-run companies, for example on the basis of market shares, spending on research and development, and growth in sales and profits.