Family Ownership

Hi Everyone,

I am trying to test the following hipothesis: Famliy controlled businesses do better than non-family controlled. BAsically meaning that when either an individual or family has either majority of shares or a high percentage of shares, they will push for changed when CEOs arent doing well, sort of what an activist investor would do. Do you know how do test this?

Thanks,

I don’t think that you can, at least on Portfolio123.

The general answer would be to look for high insider ownership, but we only get the total percentage, with no indication of what insider owns the company. This would mean that, for example, you couldn’t differentiate between ownership by a hedge fund versus ownership by a single family.

Try restricted shares % (100 minus floatpct) less insider ownership %.

The rational is that the float is all shares less restricted shares. Restricted shares included all insider owned shares, other beneficial ownership, and other types of shares with restrictions on trading.

The approach above will yield the percent of restricted shares not owned by insiders which is presumably a purer estimate of other beneficial ownership (family members of c suite, boards of directors, pe/vc ownership, etc,),

Hedge funds are insiders or institutional?

Sadly, there is no objective answer to this or even to whether an institution is or is not an insuder.

Different providers count float different ways when it comes to dealing with large blocks held by institututions for long term investment thagt are not likelyh to trade; analysts will oftern contact holders and make determinations after conversations.

Data, as a field, has not yet reached its final stage of evolution.