National Bank report reveals publicly traded family firms outperform wider market
Family owned and controlled businesses have an advantage over other businesses and may also be better positioned to outperform in the transition to a green economy.
A new analysis by National Bank of Canada considered the performance of 43 of Canada’s publicly traded businesses controlled by families and founders included in the NBC Canadian Family Index, calculated by S&P Dow Jones Indices, which includes firms with over $700 billion market cap.
Over 18 years from June 2005 to June 2023 the index saw a cumulative return of 324% (8.3% annualized) compared to 242% for the S&P/TSX Composite Index (7% annualized) on a total return basis.
"One great challenge lies ahead: to deliver more long-term value with a smaller carbon footprint. Being controlled by a family makes a firm uniquely capable of adopting a long-term focus,” said Vincent Joli-Coeur, vice-chairman, Financial Markets at National Bank of Canada. “The road to a decarbonized world will require massive investment as well as that all-important long view.”
Family insights
The report also features the insights of some of Canada’s family business leaders, including Olivier Desmarais, chairman and CEO of Power Sustainable.
"If something is inevitable like climate change, steer into it. That is what my grandfather’s Desmarais and Chrétien always did,” he said. “Families are in the game for the long term. Therefore, we're able to go through economic cycles and adapt our business accordingly and we get to build solid foundation blocks to execute on our strategic vision."
