Strategic Capital Allocation in Family Business Portfolios PPT
This PPT slide, part of the 26-slide Family Business: Third Generations Tensions PowerPoint presentation, outlines the parameters for managing a family business portfolio, emphasizing the allocation of capital across various asset types. It categorizes assets into 3 main groups: controlled operating companies, non-controlled operating companies, and financial investments, excluding real estate, along with real estate assets.
In the "Controlled" section, it highlights sector-focused companies where the family group maintains full ownership. The levers for these companies include active ownership, synergy realization, and capital allocation. The measures of success for these entities are net income growth, Economic Value Added (EVA), and Return on Invested Capital (ROIC).
The "Non-controlled" section discusses companies where the family has a relevant, but non-controlling stake. Here, the focus shifts to stock and investment selection as well as capital allocation. Performance is gauged through appreciation, dividend payouts, and ROIC.
The "Financial investments" category encompasses cash, equities, fixed income, and other financial instruments. It emphasizes the importance of selecting investments that yield returns above benchmarks, aligning with the family's financial goals.
Lastly, the real estate section includes income-generating properties and family-managed assets. It also mentions land banks, with performance metrics focusing on yield for income-generating assets and overall value appreciation.
This structured approach to portfolio management allows family businesses to balance collective and individual needs, ensuring that capital distribution aligns with strategic objectives. The slide serves as a critical tool for understanding how to effectively manage diverse assets within a family business context.
This slide is part of the Family Business: Third Generations Tensions PowerPoint presentation.
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