Family Offices as Investors: Reliable Partners for SMEs — Especially in the Crisis
The Mittelstand, the foundation of the German economy, is largely made up of traditional family-owned companies that are often firmly rooted in their home region and are leaders in their respective market niches — the classic hidden champions. Family investors often have an entrepreneurial background themselves — many of them go back to classic medium-sized family businesses. Accordingly, they share the values of the SME sector: sustainability, a sense of responsibility and tradition, and the desire to preserve the company for future generations. Based on these shared values and experiences, shareholders and companies can meet at eye level and form partnerships that are stronger and more trusting than typical investor-investor constellations.
When they act as direct investors and are appropriately professionalized, they often use less or even no debt capital for financing; instead, they have patient equity capital and a typically long investment horizon. This enables them to plan and drive sustainable growth in partnership with the management teams of their investees, who in many cases also invest in the company, regardless of the current economic situation. In addition, appropriately positioned family investors can ideally support their portfolio companies in their further growth at the right time through many years of experience, market and industry expertise as well as an international network.
In addition to the many other challenges that arise during crises such as the Covid 19 pandemic, the availability of debt capital for businesses is often limited. Since family investors can invest without the usual pressure on returns from borrowed capital, they are one of the buyer groups that can continue to offer attractive conditions as well as transaction security even in times of crisis. This long-term investment approach and active support through know-how and network ensures that companies have the necessary backing in the crisis to make the right decisions at the right time and thus not only survive turbulent times but also grow from them.
About Bregal Entrepreneurial Capital
Bregal entrepreneurial capital is part of a family business built over generations. The focus is on investments that are open to long-term commitments and independent of developments on the financial markets. Bregal Unternehmerkapital identifies companies that have strong management teams and are considered market leaders or “hidden champions” in their respective segments. Thanks to flexible financing and transaction structures, both minority and majority shareholdings are targeted. In doing so, Bregal Unternehmerkapital is able to sensitively and result-orientedly design even complex industrial spin-offs, management buy-outs or succession situations. Bregal Unternehmerkapital strives to support companies in increasing their sales and profitability in a sustainable manner and accompanies them with capital, long-standing financing expertise and a broad network of entrepreneurs and industry experts. For more information, please visit our website, www.bregal.de.