European finance initiative launched for family businesses

Euronext, the European stock exchange seated in Amsterdam, Brussels, Lisbon and Paris, has launched an initiative to support the financial needs of family businesses and to inform them more about the potential benefits of capital markets for their companies.

The initiative aims to encourage family businesses to view financial markets as a source of financing, a governance and transmission tool, and a means of raising their profile with investors, says Euronext.

“Family businesses make an essential contribution to European economies and employment,” says Anthony Attia, CEO and global head of listings at Euronext. “Through their varied profiles, risk management and scope for added value, listed family businesses are very attractive to most investors. Yet cultural hurdles can slow decisions when opening up a company’s capital.”

He added: “Our new initiatives and efforts to raise the profile of family business stocks are designed to show how the exchange can help these companies grow and prosper—above and beyond financing.”

As part of these efforts, Euronext together with a number of partners has launched FamilyShare, which will offer support and coaching to unlisted family businesses. One of its partners is VTM Conseil, a Paris-based law firm specialising in the family business sector.  “We are helping to devise, select candidates, and implement the program,” says Valérie Tandeau de Marsac, the head of VTM Conseil.

She added: “There is a bit of mistrust between family businesses and everything that is related to capital markets, so this is part of the thinking behind the initiative - to improve trust between the two.”

Also, for family businesses, access to capital markets will give them an opportunity to grow their business, says Tandean. “Many of them have this glass ceiling of around €500 million in annual revenues, and access to capital markets will help them break out of that ceiling and compete better globally.”

The initiative will also see Euronext launch a new family business index, which will comprise 90 component companies in the four countries covered by the exchange.