CASE STUDY

Family office to investment holding company

Situation

A prominent European industrial family had sold its main corporate operating company.  The principal sought to reinvest the capital in a way that both preserved the wealth and enabled it to retain its entrepreneurial spirit. Its aim was to have world-class businesses in both its heritage industry (100 years of involvement) and the financial/investment sector, where it had developed expertise in the past decade. The existing structure was a family office, mainly populated by individuals with private banking background, who were concerned with investing their own money and competing personal interests.

Approach

The aim was to create an institutional standard corporate structure for the holding company, distinct from the personal ‘family office’ type interests, whilst fostering an entrepreneurial ecosystem for the specialist industrial and financial operating companies (and in some cases finding leaders for these entities).  As is sometimes the case with family shareholders, it did not follow a neat sequence and was subject to the situations of the personalities involved.  The corporate structure required a new COO (CEO standard, without the CEO ego), CFO (rising star from highly acquisitive and successful financial) and General Counsel (from one of the world’s leading PE firms).  Appointing a leading player from each of the industrial and financial industries to lead flagship operating entities in their respective sectors. At the same time, we helped ensure institutional standard governance, through advising on the appointment of several independent board directors to both the holding company and operating companies.

Impact

Through a decade-long process, the entity evolved from something more akin to a personal investment office, into an investment holding company with a long-term hold private equity style value orientation.  Beyond purely providing capital, the holding company now contributes to strategic value across an number of areas from the centre.  It is regarded as a highly attractive environment for business leaders coming out of the publicly listed world as it enables them to concentrate on the aspects they find most fulfilling i.e. growing companies ahead of governance, working with a shareholder with a 10 year plus investment horizon.