Succession Planning in an Age of Longevity and Liquidity

Corporate Finance & Restructuring

February 28, 2017

Woman standing at the top of chess piece

Owning a family business presents its own unique challenges, especially when it comes to succession planning. However, recent trends and new structures now offer some alternatives which may provide the ideal solution to passing on your assets to the next generation.

There is a thought-provoking line in Nassim Taleb’s book, The Black Swan, which says, “Reading the newspaper makes you dumb.”

This is a reference to the common occurrence that, when we read a persuasive article and opinion by an ‘expert’, we are likely to be influenced by those views and perhaps act on them. Whereas, in fact, we should consider any opinions in the context of the current and predicted future environment, with as many facts and as much evidence as possible at our disposal.

And so it has been with the many predictions, some even based on apparent rigorous research, that many family businesses would be sold as ageing baby boomers wanted to retire, necessitating a liquidity event to enable assets to be equitably distributed to their children. Whilst there have been some such sales, the avalanche has not eventuated, and at the risk of potentially placing ourselves in the position of those so-called experts, we venture to suggest that, based on our assessment of the current and future business environment, it will not come.


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