Family Capital’s Best Quotes from 2016

“As interest in a business is passed down, and more and more people have ownership who aren’t directly committed to building the business but more interested in taking money out of it, then you get in this syndrome of killing the goose that laid the golden egg.”

Charles Koch, co-owner, chairman of the board, and chief executive officer of Koch Industries

You have to continually shift. If I lean back with my product range I can be happy…that is the first step to hell.”

Count Anton-Wolfgang von Faber-Castell, who died earlier in 2016, was the head of the 8th generation famous German pencil maker, Faber-Castell

“These ideas (stakeholder theories) have become much more mainstream over the past 25 years.”

R. Edward Freeman, a professor at the Darden School of Business at the University of Virginia, and famous for his early promotion of stakeholder values 

“By taking in another family there will have to be a compromise of some sort. I’ve even said no to managing the funds of my siblings and my mother.”

Johan Andersen, the chairman of Ferd, a single-family office

“Since the family ownership allows you to have a generational view it is very much aligned with the time horizons of winemaking. In fact from the day you plant a new vineyard, it will take over 25 years to create a great Reserve sparkling wine. It is like a generational renewal.”  

Matteo Lunelli, the head of his family’s wine business, which makes the famous Italian sparkling wine, Ferrari

“We should be a Harvard textbook case study on how not run a business.”

Eric Stroh, which was quoted in a book entitled Beer Money: A Memoir of Privilege and Loss written by his daughter, Frances Stroh, which portrays the demise of the family-owned Stroh Brewery Company

“The top earners among the current taxpayers were already at the top of the socioeconomic ladder six centuries ago – they were lawyers or members of the wool, silk, and shoemaker guilds; their earnings and wealth were always above the median.”

Study on Italian wealth by the Bank of Italy, which shows how wealth stays in families for many generations, despite the famous three generations concept of it

“Our family business has a set of values – like the fact that our business has been around for 100 years, or more – and those values are perhaps one of the ways we attract talent, and also keep talent.”

Marc Puig, CEO of Puig, the Spanish luxury group

“The profitability, stability and long-term focus of family firms are attractive to private equity and they are finding ways to offer ‘patient capital’ through new funds.”

Carrie Hall, a partner and family business leader Americas for EY

“Yes, it might be business first when hiring a family member, but when a family member isn’t performing well it might not be business first.”  

Alexander Koeberle-Schmid, a senior manager at KPMG   

“A big impetus to set up a family office in India is the desire for many families to take a minority or even majority stakes in startups. Wealthy families have witnessed some investors making a 10-fold return on their capital through investing in a start-up. Many want a piece of the action.”   

Aditya Gadge, CEO of the Association of International Wealth Management of India

“Given the choice, I would rather not have been born wealthy, but I never think of giving it up. I can’t sell. It doesn’t belong to me.”   

Duke of Westminster, who died earlier this year

“In the west, the boundaries of a business family are its owners, their spouses and their immediate descendants; but in China, this idea almost feels socially unacceptable.”   

Florence Tsai, Cambridge Family Enterprise Group, and John A. Davis, Cambridge Family Enterprise Group and Harvard Business School

“Minority shareholders can really harm a family business and make it more short-term oriented. In our study, we found that in those countries in which minority shareholders have much power, family firms are much more short-term oriented and hardly invest anything in innovation.”  

Nadine Kammerlander, a family business specialists at Otto Beisheim School of Management

“We see nearly every day a case where a few people on the staff of a family office want to place their portfolios into high yield/high growth private markets, but these guys have little, or no expertise to invest efficiently. You look at any successful private equity investment house, like Blackstone, KKR, and Bain Capital. It took those guys decades to learn the craft.”  

Thomas Krenik, CEO of Nextvest

“The traditional patriarchal dominated family business culture is breaking down, and gradually women are exerting their influence in family businesses.”   

Professor Kavil Ramachandran, executive director at the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business  

“Family offices, active in direct and co-investing today, need to carve their own future rather than compete head-on with other professional investors. They need to do this in three ways: maintain an abundant mindset; to be seen as a committed investor with a strong brand to growth businesses; and, be highly conscious of their own behaviour and language.  

James Berkeley, Ellice Consulting

“You can’t just rely on your heritage, as any family business knows. You need to be about today and what people want today.”  

Nicholas Bowman-Scargill, the man behind the re-launch of his family business and managing director of Fears Watches

“There are three characteristics that are likely to be found in family investment groups which underpin their robustness and success. These are connections, values, and long termism.”

Morten Bennedsen, The André and Rosalie Hoffmann chaired professor of family enterprise at the Wendel Centre for Family Enterprise at INSEAD