Euronext has announced the launch of Euronext Family Business, the first European index dedicated to family businesses, designed to highlight the performance of 90 family companies listed in the four countries covered by Euronext.
Components of the Euronext Family Business Index are selected from listed companies in compartments A, B and C of Euronext and on Alternext. To be eligible, candidates must meet criteria defining family businesses as determined by Euronext, with no limit on size or sector.
The criteria include the requirement that the physical person(s) who created the company, or the physical person(s) who acquired the company capital, or their spouses, parents or children or direct heirs of their children, have significant influence on the control of the business.
In addition, at least one representative of the family or relatives is formally involved in the governance of the company and the next generation guarantees control or shows a clear-cut intention to take over the company.
This index counts 30 listed companies in compartment A, 30 in compartment B, and 30 in compartment C or on Alternext. Selection criteria are based on liquidity (80 per cent of the most liquid stocks in each category) and market capitalisation.
Euronext writes that the new index is part of a series of initiatives targeting family businesses launched by Euronext on January 24 to provide additional support and promote financial markets as a source of financing.
These include roll-out of FamilyShare, a Europe-wide programme offering support and coaching to unlisted family businesses with growth strategies that may require recourse to bond or equity markets, and, through a partnership with Morningstar, improved financial research coverage of small-and mid-size family companies listed on Euronext.
Euronext currently has 216 family businesses listed on its markets, together representing market capitalisation of EUR852 billion. This includes 157 small and mid-size companies whose total market capitalisation comes to EUR31 billion.