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Same same, but different: capital structures in single family offices compared with private equity firms

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  • Antonia Schickinger

    (WHU–Otto Beisheim School of Management)

  • Alexandra Bertschi-Michel

    (University of Bern)

  • Max P. Leitterstorf

    (Hochschule Bonn-Rhein-Sieg)

  • Nadine Kammerlander

    (WHU–Otto Beisheim School of Management)

Abstract

Despite the increasing interest in single family offices (SFOs) as an investment owned by an entrepreneurial family, research on SFOs is still in its infancy. In particular, little is known about the capital structures of SFOs or the roots of SFO heterogeneity regarding financial decisions. By drawing on a hand-collected sample of 104 SFOs and private equity (PE) firms, we compare the financing choices of these two investor types in the context of direct entrepreneurial investments (DEIs). Our data thereby provide empirical evidence that SFOs are less likely to raise debt than PE firms, suggesting that SFOs follow pecking-order theory. Regarding the heterogeneity of the financial decisions of SFOs, our data indicate that the relationship between SFOs and debt financing is reinforced by the idiosyncrasies of entrepreneurial families, such as higher levels of owner management and a higher firm age. Surprisingly, our data do not support a moderating effect for the emphasis placed on socioemotional wealth (SEW).

Suggested Citation

  • Antonia Schickinger & Alexandra Bertschi-Michel & Max P. Leitterstorf & Nadine Kammerlander, 2022. "Same same, but different: capital structures in single family offices compared with private equity firms," Small Business Economics, Springer, vol. 58(3), pages 1407-1425, March.
    • Handle: RePEc:kap:sbusec:v:58:y:2022:i:3:d:10.1007_s11187-021-00448-x
    DOI: 10.1007/s11187-021-00448-x
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    1. Susana Álvarez‐Díez & J. Samuel Baixauli‐Soler & María Belda‐Ruiz & Gregorio Sánchez‐Marín, 2023. "Variable selection for classification and forecasting of the family firm's socioemotional wealth," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 42(8), pages 2063-2078, December.
    2. Virginia Blanco-Mazagatos & M. Elena Romero-Merino & Marcos Santamaría-Mariscal & Juan Bautista Delgado-García, 2024. "One more piece of the family firm debt puzzle: the influence of socioemotional wealth dimensions," Small Business Economics, Springer, vol. 63(2), pages 831-849, August.

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