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.