Why it can pay to keep your investments in the family

Family-run businesses make up a huge percentage of the UK’s private companies. Buy into a listed family firm, and you’re likely to net a healthy return on your money, says Merryn Somerset Webb.

People queueing at a Hermes shop  © MIGUEL MEDINA/AFP via Getty Images)
Around 40% of Europe's companies with $1bn plus sales – such as Hermès – are family firms © Getty
(Image credit: People queueing at a Hermes shop  © MIGUEL MEDINA/AFP via Getty Images))

You’ve probably just spent an awful lot of time with your family. Some of you will want a break. Some of you will have cooked up ideas about how you might keep doing more together. And if boredom leads to innovation, my guess is that we are soon to see an explosion of family business start-ups. Even I have given in and am doing a podcast with my sister.

If one of these start-ups is yours, you won’t be alone: in the UK, family businesses make up about 28% of GDP. That said, you will probably fail. About 70% of family businesses vanish long before the siblings get to start arguing about whose oldest kid gets to take over.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.