Why it pays to invest in family firms

Studies show that family-run businesses do better than their peers over the long term. But how can ordinary investors get in on the act? Richard Beddard explains.

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As a model of a successful British family business, component maker Dewhurst (LSE: DWHT) takes some beating. Walking through its factory in Feltham in west London with its chairman, Richard Dewhurst, is like being shown around a home by the proud owner. Richard, a trained engineer, shows a familiarity with electronics, metal bashing, and the processes and people that bring them all together that only comes from decades of decisions shaping the factory, its products, and its relationships with staff, suppliers and customers. The factory is nearly brand new Dewhurst came to Feltham four years ago, when it outgrew its ancestral home in Hounslow. But a few of the machines hark back to an earlier era. They moved with the company, as did the expertise built up since it was founded in 1919 by Richard's grandfather, Melbourne Dewhurst.

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CompanyWhat it doesMarket capitalisation*Debt adjusted p/e*
Colefax (LSE: CFX)Designs and distributes high-end wallpaper and fabric.£46m10
Dewhurst (LSE: DWHT)Manufactures components for lifts, keypads and railway rolling-stock.£42m9
FW Thorpe (LSE: TFW)Manufactures lighting systems for commercial and public buildings.£272m23
PZ Cussons (LSE: PZC)Supplies consumer goods, including personal hygiene, beauty, home and nutrition products.£1,465m20
Solid State (LSE: SOLI)Manufactures and distributes specialist electronic components and computer systems.£34m7
*Source: SharePad, 9 Sept 2016
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Richard Beddard

Richard Beddard founded an investment club before joining Interactive Investor as an editor at the height of the dotcom boom in 1999. in 2007 he started the Share Sleuth column for Money Observer magazine, which tracks a virtual portfolio of shares selected for the long-term by Richard. His career highlights include interviewing Nobel prize winners, private investors and many, many company executives. 

 

Richard is freelance writer who invests in company shares and funds through his self-invested personal pension. He has worked as a teacher and in educational publishing, and is a governor at University Technology College, Cambridge. He supports the Livingstone Tanzania Trust, a charity supporting education and enterprise in Tanzania. 

 

Richard studied International History and Politics at the University of Leeds, winning the Drummond-Wolff Prize for "distinguished work in the field of international relations".