Business

Profile: How a family business became a family investment powerhouse steered by a family member

The direct investment boom in private markets, coupled with digital distribution, has led many mid-sized and bigger family businesses to consider investing away from the operating company as a way to sustain the family’s wealth. 

One family in France has managed this transition very well. Up until recently, it’s been led by an 8th generation member of the dynasty.  

Peugeot, one of the great European automakers, is also the name of one of France’s best-known family dynasties. The Peugeot family’s link to the automaker goes back to the late 1800s, but the family had beforehand established a manufacturing business in the early part of the 19th century, providing the foundation of the family’s wealth today. 

The Peugeots have successfully prospered for more than 200 years due to their ability to adapt to changing economic circumstances. 

And in recent years, much of those efforts have been driven by the family investment/holding group, FFP. Listed on the Paris Stock Exchange, FFP has diversified the family holdings away from the operational business, the automaker PSA Group, since 2002. This has proven a smart move given the ever-growing disruption felt by the big old economy automakers in recent years.  

Robert Peugeot (photo: FFP)

Much of those efforts have been driven by Robert Peugeot, a member of the eighth generation of the family business dynasty, who recently stepped down as CEO after 17 years at the helm; he remains chairman. Being mainly invested in the automaker, FFP now has two-thirds of its €4 billion-plus under management invested outside of the carmaker, mainly due to the diversification efforts of Robert Peugeot. 

FFP, which is majority-owned by members of the Peugeot family through holding group Etablissements Peugeot Frères, under the guidance of Robert Peugeot has been a savvy investor. This has helped to make the transition away from the main operational business. 

In 2004, FFP bought 5% of Group SEB, the world’s biggest manufacturer of cookware, and saw the value of its investment more than quadrupled in the business. It had similar success with its 5% share in Opera Group, a French healthcare group. 

Other notable investments include LISI, a French aerospace group, SPIE, an engineering group, Total Eren, a renewable energy group, CIEL, a Mauritian-based holdings group, and Château Guiraud, a Bordeaux wine producer. 

True to its family business background, FFP likes investing for the long-term. That’s why it invests in family businesses as well as co-invests with them.  Group SEB is majority-owned by the Lescure family, and CIEL is majority-owned by the Dalais family. 

FFP has co-invested with the Luxembourg-based JAB Holding Company, controlled by members of the German Reimann family, as well as the Wendel family, owners of the eponymous Paris-based investment group. But it also has the clout and contacts to co-invest with hard-nosed private equity groups like Paris-based PAI Partners, London-based Apax Partners, and San Francisco-based Bay Grove.

For the most part, the emphasis at FFP is on taking minority stakes in listed and unlisted mature businesses. The group has tended to avoid direct venture investing, particularly at an early stage. But two months ago, FFP did invest at a growth capital level (Series D) in Indian group Livspace. Whether this suggests the new CEO, Bertrand Finet, will place more emphasis on venture and invest in growth markets like India, remains to be seen. Finet’s background is in private equity investing.  

Real estate accounts for around 9% of FFP’s portfolio, and again, the Peugeot family’s connections with other family dynasties is a theme here as well. FFP has a stake in Immobilière Dassault, a commercial real estate group majority-owned by the Dassault family, one of France’s wealthiest dynasties and better known for their aviation business. 

Although the new CEO Finet only took over in May, the Peugeot family may ultimately like one of their own to steer the investment business in the future. The family, for which there are many branches, has many to pick from, not least Robert’s offspring. 

His eldest son Charles is managing director of DS Automobiles in Belgium, the premium automotive brand of Group PSA. And youngest son Edouard works for London-based private equity group TowerBrook, which is backed by George Soros, and run by two of the sharpest investors in private equity, Ramez Sousou and Neal Moszkowski. 

Robert Peugeot and the Peugeot family shareholders probably feel FFP is well-placed to deliver strong growth in capital and dividends for the family’s heirs for many years. 

FFP also hasn’t done that badly for institutional and retail investors on its listed performance. 

Although experiencing a volatile 2020 as many stocks have against the background of the Covid-19 pandemic, over five years FFP’s stock has outperformed the main Paris stock exchange index, the CAC 40, by 15%. 

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