Most people would agree that family firms are at the heart of the economy. What is less well known is that they can make excellent investments too. In fact, over the past 15 years, investment bank UBS found that unquoted SMEs (small/medium enterprises) generated returns double those of their listed peers.
The main reasons being that they generally have longer time horizons, act quicker and more decisively, are 100% customer focused, hold managers to account and are committed to shareholder returns. Importantly, without taking on excessive debt either.
Core principles, which we think are the bedrock of privately owned Marshall of Cambridge (Holdings) Ltd (MCH). It was originally founded in 1909 by David Marshall as a chauffeuring business. Afterwards it expanded into vehicle sales/servicing, and later aerospace, where in 1937 it relocated to its current 900 acres site at Cambridge airport.
Since then, both businesses have flourished. So much so, that the namesake motor dealership, Marshall Motor Holdings plc (AIM: MMH) was partially spun-off and separately listed in April 2015 (MCH’s stake now 64.46%). The military aerospace/defence arm (MADG) has been supporting the RAF’s Lockheed Martin C-130 Hercules transporters since they came into service in 1967 and in 2006 clinched a landmark £1.5bn contract to provide whole-life maintenance/support for the fleet, which continues today.
Adding to the portfolio of activities, MCH has just embarked on the development and sale of 2,000 residential properties on the perimeter of the airport. Working in partnership with homebuilders like Hill Residential, expecting to generate c. £200m of cash over the next 10-15 years. Outline planning permission has already been granted for 1,300 homes, with additional decisions expected shortly.