Private equity is the enemy of family businesses, so says the conventional thinking. But family business dynasties, or those linked to these dynasties, have set up private equity groups themselves. After all, they often know a thing or two about private businesses and can bring that expertise to deal making and the management of the acquired company. Here’s five notable family-related private equity groups...and what they’re up to.
Alessandro Benetton, an heir to the billionaire family that owns the famous Italian clothing company, set up the private equity group 21 Investimenti more than 20 years ago. The group invests in small and medium-sized companies based in Italy, France and Poland. It has so far made around 80 investments in a wide variety of sectors, including healthcare, and food and beverages. Many of these investments have been in family businesses. Alessandro recently said in an interview that 21 Investimenti wants to lengthen its investment horizon beyond the traditional five to seven years. Maybe that’s to attract more family businesses, which have traditionally had very little to deal with private equity groups because of their short-term focus on flipping companies.
Set up in 2005 by John Pritzker, a member of family best known for ownership of various hotel brands including the Hyatt Corporation, Geolo Capital invests in hospitality and lifestyle businesses. One of its big investments is Commune Hotel & Resorts, which owns a number of hotel groups, catering towards the top end of the sector.
The private equity group is linked to the Brenninkmeijer family, a Dutch-German dynasty, best known for its ownership of the department store C&A. Bregal Investments is one of the biggest family-linked private equity groups with around $10 billion worth of investments. It also does private equity funds, and has a number of geographical and sector-based funds. Typically, Bregal Investments targets mid-market businesses across Europe, Asia, and the Americas.
Bernard Arnault and his family, better known for his ownership of the world’s biggest luxury group in terms of revenue, LVMH, recently decided to merge is private equity group L Capital with a US competitor, Catterton. The new firm was rebranded L Catterton, and Arnault and his family have a 40% stake in it. In the past, L Capital mostly targets lifestyle businesses with revenues of between €30 million to €400 million, and it usually takes minority stakes. Since it was set up in 2001, L Capital had made around 30 investments.
The private equity group of Billionaire Ernesto Bertarelli, whose wealth is based on the sale in 2007 of the pharmaceutical group Serono, which Bertarelli’s grandfather founded in 1906. Kedge Capital invests mostly in asset management groups. It tends to take majority stakes in businesses and says it follows a long-term investment strategy in terms of returns.