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Fri 01 Sep 2023
Legacy on the Line; Family Businesses
The old-world charm of Europe often conjures up images of traditional family businesses — vineyards in France, artisanal bakeries in Germany,,,

The old-world charm of Europe often conjures up images of traditional family businesses — vineyards in France, artisanal bakeries in Germany, or olive oil producers in Italy — that have been passed down through generations. According to the European Family Businesses (EFB) organization, these family-run enterprises are not just postcard material; they are the economic backbone of the continent. Composing 60% to 88% of all European companies, they provide jobs to around 50% of the total labor force. Yet, as millennials step into the fold, there’s a growing hesitancy to take over these businesses, risking an erosion of an essential part of European culture and economy. So, what exactly is causing this disconnect?

 

The Digitalization Gap

 

We live in the age of digital transformation — an era that has seen old business models crumble while tech-savvy disruptors rise. Millennials, born and raised in this digital era, often find traditional business models unattractive and outdated. A survey conducted by various industry players noted that the majority of millennial respondents were put off by the lack of digitalization in their family businesses. These digital natives are accustomed to the efficiencies and conveniences offered by modern technology. In contrast, many family businesses in Europe remain steeped in traditional ways, often viewing digital transformations as unnecessary or daunting ventures.

 

Skills and Experience Mismatch

 

Another growing concern among millennials is their lack of skill and experience needed to manage these businesses successfully. Consultancy firms like PwC and KPMG have published various studies that illuminate this sentiment among the younger generation. Many of these businesses are highly specialized, requiring not just business acumen but also deep industry knowledge. Millennials often feel unprepared to tackle these challenges, given their divergent educational backgrounds and experiences. As a result, the prospect of taking over the family business becomes daunting, further widening the generational divide.

 

A Clash of Values

 

Millennials also bring to the table a new set of values and priorities that sometimes clash with those of the older generations running the family business. Issues such as sustainability, ethical sourcing, and diversity and inclusion are often more important to millennials than to their predecessors. Attempts to modernize the business according to these values can lead to tension and disagreements, making the process of succession far less smooth than hoped for.

 

The Risk of Dilution

 

The reluctance of millennials to take over family businesses also poses a risk of dilution of these enterprises. Unable to find successors within the family, these businesses are often sold or merged, causing the loss of unique crafts, skills, and traditions that have been nurtured over generations. Seshu Bhagavathula, Director of the Board at CityQ, Germany, mentioned at a recent Club gathering that, “As the new generation comes into power, there seems to be no more interest in continuing with the family tradition in the business. So, with that, probably Germany will be up for sale.” This not only affects the cultural fabric but also has a ripple effect on local economies, as these businesses often serve as significant employers and contributors to their communities.

 

The Way Forward

 

Given the socio-economic importance of family businesses in Europe, bridging the generational gap is crucial. Strategies could include early exposure to the business, formalized training, and mentorship programs to give millennials the skills and confidence they need. Additionally, the older generations must be open to modernizing and digitizing their operations, not only to attract millennial involvement but to remain competitive in an evolving marketplace. It is high time that both generations acknowledge the challenges and work collaboratively to find solutions. The survival and prosperity of Europe’s family businesses, as well as the preservation of a rich and diverse cultural legacy, are at stake. The question then is not just about passing down a family business; it’s about the handover of a deep-rooted legacy to a new generation equipped to carry it into the future.

 

As we grapple with the complexities of sustaining family businesses across generations, it’s imperative to have a secure place where solutions can be discussed and formulated. 

Correlated event
We are excited to announce that on September 14th, 2023, the highly anticipated event, "The 142nd PIFW: Co-operation of Family Offices as a Guarantee of Long-Term Success. Chapter IV" will take place.

Craig Astill, the CEO of Caason Group, an Australian-based Single-Family Office: "The Club's gatherings are an invaluable opportunity to delve into the pressing topics of the family office landscape, while simultaneously fostering connections and networking with a multitude of esteemed experts."

During this event, we will delve deep into the intricacies of balancing the liquidity of investments, examining key topics such as the potential impact of artificial intelligence (AI) and task automation, the impact of climate change and the need for sustainable solutions in investment opportunities. Heads of the Single-Family Offices participating in the panel discussion will dive into the realm of SFO portfolio investments, shedding light on how they manage their investments in a time of economic difficulty. This captivating gathering will foster enriching conversations, offer valuable insights, and provide a remarkable opportunity for participants to expand their knowledge and exchange ideas. By joining this event, attendees will not only gain a deeper understanding of investment strategies but also forge meaningful connections that can propel them toward long-term success.

Guneet Banga, Executive Director at The Caravel Group Limited, Singapore: "It's truly a pleasure to engage in discussions on vital and captivating topics of the Family Office landscape while forging enduring connections and relationships."
Who will be attending:

50+ heads of Family Offices from 27 different countries of the world and international active investors. 

Why to attend?

To initiate favourable and valuable relationships with like-minded Family Offices worldwide during the 1-2-1 networking meetings;
To learn how respected leaders of Family Offices prepare their succession plans and educate heirs;
To strategize how FO collaboration not only can preserve their family legacy but also greatly benefit society;
To find out  different investment strategies, insights, trends and criteria from Family Offices across the world;
To hear uncommon insights regarding co-investments, dry powder and exchanged deal flow;

142nd Private Investment Forum Worldwide:  «Cooperation of Single Family Offices Worldwide. Chapter IV» will take place on September 14, 2023, via Zoom. The duration of the Forum will be 3 hours (from 4-7 pm Dubai/ 8-11 am New York/ 2-5 pm Zurich time). The number of participants in this exceptional event is very limited.
142nd PIFW. Cooperation of Single Family Offices Worldwide. Chapter IV
We are excited to announce that on September 14th, 2023, the highly anticipated event, "The 142nd PIFW: Co-operation of Family Offices as a Guarantee of Long-Term Success. Chapter IV" will take place. Craig Astill, the CEO of Caason Group, an Australian-based Single-Family Office: "The Club's gatherings are an invaluable opportunity to delve into the pressing topics of the family office landscape, while simultaneously fostering connections and networking with a multitude of esteemed experts." During this event, we will delve deep into the intricacies of balancing the liquidity of investments, examining key topics such as the potential impact of artificial intelligence (AI) and task automation, the impact of climate change and the need for sustainable solutions in investment opportunities. Heads of the Single-Family Offices participating in the panel discussion will dive into the realm of SFO portfolio investments, shedding light on how they manage their investments in a time of economic difficulty. This captivating gathering will foster enriching conversations, offer valuable insights, and provide a remarkable opportunity for participants to expand their knowledge and exchange ideas. By joining this event, attendees will not only gain a deeper understanding of investment strategies but also forge meaningful connections that can propel them toward long-term success. Guneet Banga, Executive Director at The Caravel Group Limited, Singapore: "It's truly a pleasure to engage in discussions on vital and captivating topics of the Family Office landscape while forging enduring connections and relationships." Who will be attending: 50+ heads of Family Offices from 27 different countries of the world and international active investors. Why to attend? To initiate favourable and valuable relationships with like-minded Family Offices worldwide during the 1-2-1 networking meetings; To learn how respected leaders of Family Offices prepare their succession plans and educate heirs; To strategize how FO collaboration not only can preserve their family legacy but also greatly benefit society; To find out different investment strategies, insights, trends and criteria from Family Offices across the world; To hear uncommon insights regarding co-investments, dry powder and exchanged deal flow; 142nd Private Investment Forum Worldwide: «Cooperation of Single Family Offices Worldwide. Chapter IV» will take place on September 14, 2023, via Zoom. The duration of the Forum will be 3 hours (from 4-7 pm Dubai/ 8-11 am New York/ 2-5 pm Zurich time). The number of participants in this exceptional event is very limited.
14th Sep 2023
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