Dear David, Access to capital from other global family businesses sounds high risk. What measures are put in place for the investor and the local family business? And how much capital are we talking about? “Another Way”
Dear Another Way, Families providing capital to other families can be from the hundreds of thousands to tens of millions of dollars. We work closely with our U.S based alliance partners on providing patient capital to our clients and others and there is clear and well used risk management process that has been in place for 20 years.
Dear David, Regarding your comment that you work closely with American-based alliance partners on providing patient capital to clients and others, does that mean you are dealing with family business clients capital raising needs, whether as a result of identified succession or not? Are your US counterparts providing patient capital on a minority interest basis? R.W
Dear R.W Yes your statements are correct and in fact we typically only deal with minority interests as when you really understand family business you know that the significant value is in the families continued control.
Dear David, If I believe my family business (property) is ready for external funding, even in the case where my family is only selling a portion, shouldn’t I be worried about US equity providers interfering in the customary family business operations process? What is your experience in this regard, how can we tell if (for example your) US investors share the values of Australian family business? M.B
Dear M.B, I suppose the question is why does your family business want to sell? Liquidity for the exit of the outgoing generation (Liquidity)? De-risking the family capital? Or looking for growth capital as part of a “becoming global or larger strategy? We are globally recognised as bringing capital to family groups firstly because that capital is from a family group that recognises the unique characteristics of families in business and importantly are patient and not looking for any quick turnaround and exit. We would want to see that the family has commenced or well developed family governance processes and that the reasons for raising capital are strategically aligned between the business, its owners and both of these systems succession needs.