Almost all of today’s biggest companies came into being through the work of a founder and family. Over time, in developed markets, ownership tends to become dispersed. Less than one-third of the companies in the S&P 500, for example, are still controlled by founding families. The picture is quite different in emerging economies. Approximately 60 percent of their private-sector companies with revenues of $1 billion or more were owned by their founders or families in 2010. And there are good reasons to suspect that proportion will only increase. As brisk growth propels emerging regions and their family-owned businesses forward, our analysis suggests that an additional 4,000 of them could hit $1 billion in sales in the years from 2010 to 2025 (Exhibit 1). If that’s how things shake out, such companies will represent nearly 40 percent of the world’s large enterprises in 2025, up from roughly 15 percent in 2010. Developing an understanding of them, therefore, is fast becoming a crucial long-term priority for would-be investors. What follows is a brief guide to their attractions—and some complicating factors.
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