The numbers don’t lie: Family firms regularly perform better than non-family firms do, as confirmed by the latest study of the Credit Suisse Research Institute.1 For 14 years, the Institute has been following 1,000 publicly listed family firms. It includes companies whose founders and founder successors still hold an equity interest of at least 20% or control at least 20% of the voting rights. Among the top companies in the Credit Suisse Family 1000 universe are Alphabet, Facebook, Alibaba, Samsung, and Roche. The oldest firms in this universe are Norwegian conglomerate Orkla (founded in 1654), LVMH (1743), Bucher Industries (1807), Carlsberg (1847), and Davide Campari Milano (1860).
Outperformance of up to 5%
On the stock exchange, these 1,000 companies generated an outperformance of 5.0% in Asia, 4.7% in Europe, and 2.6% in the US (on a yearly average). Investors can benefit from these differences, expressed as a company’s alpha, by updating their portfolios to include individual securities from the Credit Suisse universe. Or they can take the simpler and more diversified approach of adding a fund that focuses on family firms.
Family firms are outperformers
Clear outperformance since 2006
Returns adjusted for sector, weighted by market capitalization;
index with January 2006 = 100