Warren Buffett has revealed that over half the companies he invests in are family-owned. As an investor who is famed for investing in well-run, privately held companies with high barriers to entry, family businesses are particularly appealing to him. The overwhelming majority of those businesses are US-based, but Buffett is now looking to diversify his holdings with the purchase of European companies.
On Tuesday, Eitan Wertherheimer, chairman of Iscar, the Israel-based cutting-tools business Buffett acquired 80% of in 2006, spoke of his surprise and delight at how well the company has performed since Buffett's involvement. It is therefore a poignant time to take a look at how Buffett's previous investments in family-owned businesses have performed.
His former daughter-in-law, Mary Buffett, wrote a book in 1997 entitled Buffettology – The Previously Unexplained Techniques That Have Made Warren Buffett The World's Most Famous Investor. In this book, the author dedicated a chapter to companies that her father-in-law has invested in. As Buffett invests for the long term, we can safely assume that he is still investing in them today.
Families in Business has picked out six of these companies – all of them family-owned or controlled – listed below, to analyse their stockmarket performance over the past 10 years.
Family-run US brewer now in its fifth generation. CEO August Busch IV currently heads the firm, the largest brewer in the US.
Stock price 1998: $23.375
Stock price 2008: $50.650
Percentage change: +113.6%
Global manufacturer of soups and other foodstuffs, the Dorrance family – relations to founding Campbells – currently hold a stake and sit on the board.
Stock price 1998: $54.94
Stock price 2008: $32.90
Percentage change: -40.12%
A holding company, owned by the Tisch family, which is one of the largest diversified financial corporations in the US. James S Tisch is president and CEO.
Stock price 1998: $15.28
Stock price 2008: $47.69
Percentage change: +212.11%
New York Times
Famous newspaper owned by current chairman Arthur Sulzberger and family through a trust. Battling with rising costs and falling revenue, company is worth $3 billion.
Stock price 1998: $36.56
Stock price 2008: $18.28
Percentage change: -50.00%
World's largest retailer founded by Walton family. Descendents of founder Sam Walton own roughly 40% of the company: Jim C Walton and S Robson Walton currently sit on the board.
Stock price 1998: $27.44
Stock price 2008: $55.23
Percentage change: +101.28%
Newspaper and magazine business owned by Graham family. Katharine Weymouth, great-granddaughter of Eugene Meyer, who bought The Washington Post in 1933, named CEO of Washington Post Media in February.
Stock price 1998: $546.50
Stock price 2008: $636.50
Percentage change: +16.47%
To read more about Buffett's trip to Europe, click here