Warren Buffett, the American investor and philanthropist, is coming to Europe next month to meet and greet family business owners. It has been reported that he is seeking a potential acquisition in the family business sphere for his Berkshire Hathaway (BH) investment house.
This would be a major development for the 77-year-old, who has focused heavily on deals in the US. However, it would not be the first time he has courted family businesses. In January he bought a majority stake on Marmon Holdings, an international association owned by the Pritzker family (click here to read more).
In 2006 BH acquired 80% of Israeli metalworking firm Iscar from the Wertheimer family. This was BH's first major foreign investment and the third largest in its history.
Iscar chairman Eitan Wertheimer (pictured with Buffett) is one of the people behind Buffett's visit to Europe and is helping to organise a series of meetings for the American. One of these will be at the IMD business school in Switzerland where the Wertheimer family are alumni.
Joachim Schwass, IMD's professor of family business, believes Buffett has a very clearly defined perspective of ownership of his business whilst also sharing a cultural approach that is similar to family firms – he takes the long-term view, is very values-based and has an entrepreneurial spirit.
"Family businesses in Europe can learn from his distinctly defined ownership perspective, including a rational financial analysis of the business model and gaining a true return on all invested capital," said Schwass.
"In addition, families should reflect upon the wisdom, opportunities and risk diversification of a financial portfolio in the context of overall family wealth versus business."
Buffett's trip will also give family businesses "the opportunity to identify investors with a similar culture in order to draw on their financial, human and social resources in order to grow the business, or simply create liquidity for the owning family, whilst ensuring a long term future for the business,"according to Schwass.