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Investment and Participation Behaviour of Family Businesses with a Focus on Private Equity Investments and Mergers & Acquisitions (M&A)

Period: October 2015 – February 2016
Contact: Georg Jungwirth, CAMPUS 02 University of Applied Sciences
Cooperation Partner: Maximilian Eder, Manager of the Competence Centre for Marketing and Sales at Raiffeisen-Landesbank Steiermark

The changes in economic conditions in Austria and low interest levels are having an increasing effect on the investment behaviour of companies. Before the World Financial Crisis, business with alternative investments was flourishing and since Austria’s economy has recovered from the crisis, alternative investments such as private equity and mergers & acquisitions (M&A) have increased.

Regarding these transactions, especially family businesses (FBs) often address their trusted consultants. These are, according to other studies, mainly tax consultants/auditors, financial lawyers and notaries.

The aim of this qualitative study was to analyse the investment and participation behaviour of FBs with an annual turnover of more than € 5 million both in the area of private equity and mergers & acquisitions. The study also aimed to investigate the investment behaviour of wealthy private persons (especially from family businesses) regarding private equity investments and M&A.

The study comprised, among others, the following questions:

  • What is family businesses’ experience with private equity investments?
  • What are typical family businesses (segments) that are interested in this type of investment?
  • What are FBs’ reasons for private equity investments and/or M&A?
  • What are FB objectives with private equity investments and/or M&A?
  • What opportunities and risks emerge for FBs through private equity investments and/or M&A?
  • Which advantages and disadvantages do private equity investments and/or M&A have for FBs?
  • What criteria are used by FBs in selecting companies for investment (screening)?
  • Which Styrian bank is the competence leader in FBs’ views and why?

The respondents constituted tax consultants, lawyers, notaries and auditors that have experience with family business private equity and M&A transactions.