Despite 44% of of high-net-worth individuals (HNWIs) having previously invested in a family business and a vast majority (95%) citing it as a positive experience in comparison to their other investments, involvement of HNWIs in family business financing remains an underutilised route, a new study by KPMG has found.

According to the new KPMG study, Family matters: Financing family business growth through individual investors, 58% of family businesses are currently seeking external financing to fund their investment plans, but are struggling to find befitting investment partners.

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However the study reveals that investment ties between HNWIs and family businesses can potentially emerge as a highly beneficial partnership due to strong compatibility in investment priorities between both groups.

HNWIs name long-term capital appreciation (37%) as their top driver for investment, while family businesses name long-term orientation towards investment returns as their top investor characteristic (23%), according to the KPMG study.

The research also finds that both groups have a shared appetite for measured and managed risk, and value a personal touch with a clear mutual appreciation of what either side can offer one another, highlighting a largely underused partnership potential.

Christophe Bernard, KPMG’s global head of Family Business, said: "From the survey, education and awareness on the potential benefits of these partnerships have emerged as important first steps to link these two groups. This report has revealed some important misconceptions on the sides of both family members and HNWIs."

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Family businesses create more than 70% of the global GDP. Over three-quarters of the respondents (76%) of the KPMG study said that the family holds a majority stake in the businesses.

Almost 70% of the 125 HNWIs interviewed said they are attracted by small-and middle-sized companies due to the degree of stability they offer while still possessing potential for rapid growth – a profile that would match that of most HNWIs.