On 24 January 2017 Euronext announced the launch of a number of new initiatives dedicated to family businesses, in general to make it more attractive for family businesses to obtain a listing on a stock exchange.
As the primary European stock exchange with seats in Amsterdam, London, Brussels, Paris and Lisbon, Euronext aims to make it capital markets more attractive and accessible for family businesses.
The initiatives aim to inform family businesses and to make them familiar with stock markets and to encourage them to see stock markets as a useful financing and governance tool (both equity and debt financing). Under these initiatives, family businesses may enroll in a special training and coaching programme and will benefit from improved support and assistance. Additionally, a number of initiatives will be targeted at promoting the visibility of family businesses among investors and strengthening their business network.
Increasing visibility among investors
A number of new initiatives are aimed at raising the profile of family businesses with the investors.
Family businesses will be able to benefit from the free of charge quantitative analysis report under the joint programme of Euronext and Morningstar. Initially this programme was only available for small and mid-cap tech companies listed on Euronext. Starting from this year, these reports will also be provided for listed family businesses. The reports are updated on a quarterly basis and are freely available to investors.
Other measures towards greater visibility will include assistance for European roadshows, where family businesses will have an opportunity to meet with potential investors.
Further, a special index dedicated to listed family businesses will be created on Euronext.
Family share
In an effort to familiarize family businesses with capital markets, Euronext introduces FamilyShare. This comprehensive, 1-year-long training programme is aimed at educating family businesses on the financing solutions offered by stock markets and will encompass all major aspects of family businesses. The idea is to create a tailor-made coaching and support programme for each specific family business, which will cover the interests of all major stakeholders of a family business, from shareholders to employees and next generation. Considering the important role that confidentiality plays in every family business, the trainings will be held on a "family-to-family" basis.
Euronext Family Business Index
On 21 February 2017 Euronext will launch the new European index for listed family businesses, the Euronext Family Business Index.
The index will comprise of 90 companies, which differ in size from large corporations to SME's, and are located in four countries, where Euronext is seated (Netherlands, Belgium, France and Portugal).
The market value of family businesses
The wish to increase the involvement of family businesses in the stock markets has existed for some time. In Europe currently over 14 million businesses are run by families. Family businesses amount to 60% of the total number of companies in Europe and generate 50% of Europeans GDP.
Around 200 family businesses are already listed on the Euronext markets, representing over EUR 745 billion of market capitalization.
The family businesses are considered as an attractive investment category due to the variety of their profiles and sizes and their attitudes toward risk management and creating value. At the same time stock markets can help family businesses raise capital where bank loans and other types of financing may not be available.
The current initiatives of Euronext aim to bridge the gap between family businesses and stock market investors and will be rolled out over the course of 2017.