- Topics overview
- 3D Printing
- Disruptive Technology
- Global Gender Diversity
- Global Family Companies
- Robotics & Drones
- Swiss Low-Volatility
- Commodities (CMCI)
- Swiss Family Companies
- UBS LPCI
Solactive Global Family Owned Companies Index
Families: a success factor and return generator
UBS Open End PERLES on the Solactive Global Family Owned Companies Index
I. Model for success
Many internationally successful companies are run by dedicated families that want to pass on a prosperous business to future generations. A recent UBS Global Research study shows that familycontrolled companies have better long-term performance and profitability (source: "Q-Series - Why do Family-Controlled Public Companies Outperform? The Value of Disciplined Governance", April 13, 2015). The experts also discovered that share prices for family-owned companies were less volatile than their peers in global large cap indexes.
II. Unearthing the secret to their success
UBS Global Research believes that more efficient governance and disciplined cost management are the main reasons why family-controlled companies outperform their peers. They are managed for the long-term, and not optimized to meet certain quarterly targets. Rigorous succession planning also plays a big role. The world’s 500 largest family-owned companies are being run by the fourth generation on average. That builds trust for the future.
III. Quiet champions in one package
The University of St. Gallen is also deeply interested in this subject. It even maintains a research and education center on family businesses. Together with the consulting firm Ernst & Young, the St. Gallen researchers have launched the Global Family Business Index comprising the world’s 500 largest family-owned companies by sales. Listed and unlisted companies are treated differently, however. Listed companies only count as familyowned if one family holds at least 32 percent of their voting rights. In Switzerland, that criterion holds true for example for pharmaceutical giant Roche, logistics specialist Kühne + Nagel, and the Schindler Holding industrial group. There are large family-owned multinationals in other countries as well. They include Axel Springer, Beiersdorf and Henkel in Germany, H&M in Sweden, and Ford Motor, Hyatt Hotels and Wal-Mart in the US.
Opportunities & Risks