Australia has been named as the leading country in Asia Pacific for outperformance by family-owned businesses with outperformance of 23% versus non-family-owned ones.
In the latest Credit Suisse ‘Family 1000: Post the Pandemic’ report, the firm found Australian family-owned businesses had a higher ‘family alpha’ than other countries.
This family alpha factor was represented by the fact that revenue growth generated by family-owned companies was 200bps higher than that of non-family-owned companies globally, in both large and small-cap companies. The Family 1000 firms had outperformed non-family ones by an annual average of 370 basis points since 2006.
This was even stronger in Asia Pacific, which had over half the Family 1000 companies, with the average family-owned company seeing compound excess returns of 500bps per annum.
In Australia, there were six family-owned businesses with a total market capitalisation of US $63.3 billion. These had the strongest family alpha with an average outperformance of 23% since 2006, (although Credit Suisse acknowledged Australia had a small sample size).
This compared to 12% for Chinese companies and 9% for companies in Japan.
Andrew McAuley, chief investment officer for Credit Suisse Australia Private Banking, said: “Our research shows that listed companies, where a family or founder has a significant shareholding, outperform non-family companies on a number of metrics.
“In particular, they produce better outright share price performance, have higher revenue growth, tend to be more profitable and have slightly better environmental, social, and governance (ESG) scores. The universe of Australian companies although small in number, has produced an exceptional outperformance of 23% p.a since 2006, and is the leading country in APAC on this metric.”
