Unlike some things in life, in investing I think keeping it in the family can pay dividends. Fortunately, if you're investing on Australia's ASX there are many companies run by founders or their families, such as ARB Corporation Limited (ASX: ARB), Reece Ltd (ASX: REH) and ResMed Inc. (CHESS) (ASX: RMD).
Why family companies?
I won't guarantee that it will bring you superior investment returns, but there are few management teams I would rather invest with than those of the founding family.
If a founder is at the helm of a company, he or she will have their pride and wealth tied to the fortunes of the company. It is the same with family businesses.
But of course, some golden spoon feed children turn out to be rogues with money.
However, if you find the right family to invest alongside it can be very profitable.
Here are three family-run ASX companies for your investing watchlist.
ReMed Inc. ResMed shares are listed on both the Australian and New York markets. A maker of devices for treating respiratory conditions like sleep apnoea, its history dates back to the late 80's. The business was started by the family of its current CEO, Mick Farrell. You can read more about ResMed here.
ARB Corp. ARB is the name of Australia's leading bull bar and 4×4 accessories business. If you are on the road today or tomorrow, look around, chances are you'll see the little red logo.
Not only are descendants of the ARB Corp founder involved in running the $1.2 billion company, it is named after him: Anthony Ronald Brown.
Reece. The $4 billion business is the all round leader in bathrooms and plumbing needs in Australia and New Zealand. The Wilson family have led the company to continued success over many years. Its lack of trading liquidity keeps many big investors away from the company, which I think is a positive for small investors.
Foolish Takeaway
I do not find it surprising that these three companies have crushed the return of the market or S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the past decade.
While their shares do not come cheap I think each of them deserves a spot on your watchlist.
