Succession before liquidity: the order that decides the price

Sixty-one families hold a relationship with the Private Wealth and UHNW division. Thirty-eight of them sold an operating business in one of the sectors the group originates in: pharmaceuticals, animal health, aquaculture and marine, agri-science and specialty materials. The division has advised on fourteen such sales since 2021. The pattern across those fourteen is consistent enough to state plainly. Families that settle governance before they settle price complete faster, on better terms, and with fewer disputes afterwards.

Nine of the fourteen families had a written family constitution in place before the sale process opened. Those nine took a median of seven months from mandate to completion. The five without took a median of thirteen months. The difference is not diligence and it is not drafting. It is the time spent deciding who signs, who is bound and who receives what, while a buyer waits and revises its offer. Two of the five sales without a constitution were repriced during that period.

A family constitution has no binding force in most of the jurisdictions involved, and its effect is procedural. It settles four questions before they become expensive: who speaks for the family in a negotiation, how a decision is reached when the family disagrees, what happens to a member who wants liquidity when the others do not, and which assets are never sold. A document that answers those four questions is worth several months of process time.

The distribution question follows the sale and is usually harder than the sale. A single sum divided equally is rarely right where one branch of a family ran the business and another did not. The practice of the division is to separate the reward for operating the company from the inheritance of ownership, and to make that separation visible in the documents rather than implicit in the numbers. Six of the fourteen families used a fixed operating award before the residue was divided.

Reinvestment is where the discipline of the firm applies to the client. The four tests that govern movements of the balance sheet are put to the family: whether the advantage that produced the wealth was structural or temporary, whether it can be converted and on what timetable, whether the proceeds have a better use, and what loss the family is prepared to accept. The fourth question is the one most families have never been asked by anyone.

The division sells no product. It advises, it structures, it introduces, and it is paid for the advice rather than for the transaction. Any client may require that a decision affecting their mandate is reviewed by a person rather than by a model, and that review is answered within five business days. Three enquiries were declined in the year to 30 June 2025 because the eligibility standard was not met, and the reason was given in writing in each case.

Published 2025-09-16 by the Private Wealth & UHNW division. Research is prepared for eligible counterparties and does not constitute advice.