Asian companies typically start as family empires. While many remain secretive to the point of paranoia, you're starting to see those entities open up a little. Heck, they might even accept a little of your money. But only if they like you.
How to find them? Camden Wealth Research and Citibank's private-banking arm have just put out their inaugural ranking of the Top 50 "Global Challengers," mid-sized family businesses showing strong growth and great potential.
Five of the eight Asian representatives are already publicly listed in their home markets. The other three are clearly worth watching, should they head in the direction of going public.
D&L Industries PH:DNL ranks second globally, according to the report. It has been listed in the Philippines since 2012, although the second generation of the family that is now in charge retains 68.7% of the stock.
Most of the family firms that make the list are in traditional industries, and D&L is no exception. It makes food ingredients such as fats and oils, colorings and additives for plastics, and products for personal care and home-cleaning products.
The company's average annual growth is frankly startling at 42.5%. That puts it behind only Meridian Health Plan and that company's 47.3% rate.
International Container Terminal Services PH:ICT is the other Filipino entry. Also listed in Manila, it runs container operations at 30 terminals and ports around the world. Basically, it gets goods off ships, shoves them in warehouses, then puts them back on ships or trucks.
Basic, but it's good at it. Started by the billionaire Enrique Razon, the third generation of the Razon family runs the company now. It is producing growth of 11.8%, which places it at No. 16 in the list.
The KBZ Group ranks third globally among these dynamic family companies. It is one of the biggest companies in Burma -- which I continue to refuse to call Myanmar, whatever the former military dictatorship says about it! It's often the biggest taxpayer in the country. It is privately held, in a country where the biggest listings tend to move to Singapore.
Full name the Kanbawza Group, KBZ is a good old-fashioned Asian conglomerate. It appears to have expanded in random directions that have more to do with the penchant of those running it than any sense of an area of expertise. The second generation of the family holds less than 50% of the stock -- highly unusual for a family firm, but it is producing growth of 31.1%.
It owns not one, but two airlines: Myanmar Airways International, with Air KBZ thrown in for good measure. Its hotel operations fit that theme, but it's also a major mining company, makes shoes, owns a soccer club and sells gemstones -- to name a few of its interests. Since it's privately held, I guess the family can go ahead and continue to do whatever it wants!
A trio of Indian companies feature further down the rankings.
Jet Airways NSE:JETAIRWAYS is the second-largest Indian domestic carrier, with around one-fifth of the market, behind the budget carrier IndiGo. Starting out as an air-taxi service, it grew into the largest Indian airline, but lost its spot amid fierce fare wars. It also flies internationally, bringing its total number of destinations to 66.
Thermax NSE:THERMAX makes the boilers that carry the storied Thermax brand as well as other products for heavy industry. Founder A.S. Bhathena passed the company down to his Aga relatives, meaning the third generation of the family is now running the company.
Its 7.0% growth ranks it 28th on the list. Jet Airways is seven spots above it at 9.4% annual growth.
Dabur India NSE:DABUR is the third Indian representative. The company is the largest manufacturer of traditional Indian ingredients used in Ayurvedic medicines.
Two other privately held Asian companies make the list.
Singapore-based Sunray Woodcraft Construction makes fittings and constructs interiors for buildings. It is celebrating its 20th anniversary this year under CEO Connie Wu. The company recovered from a catastrophic fire that destroyed its original production premises in 1999.
With aspirations to go global, it told PricewaterhouseCoopers that plans for an IPO, as well as succession planning to turn the business over to the eight members of the second generation now working for the company, are well under way.
The Crystal Group, based in Hong Kong, is a clothing manufacturer that's almost 50 years old. Founder Kenneth Lo has turned a sweater factory into a company that employs 48,000 people around the world. It supplies companies like GAP (GPS) , Levi's, Victoria's Secret and Abercrombie & Fitch (ANF) .
Investors should tread carefully in Asia, however. Founding families in this part of the world have a tradition of taking in public money but continuing to run the companies like their own private fiefdoms.
They maintain control at times through a byzantine series of cross-holdings between subsidiaries, or by issuing a separate class of shares that grants them majority voting power. Minority shareholders are an afterthought.
Interestingly, there's not a single technology company among the 50 best. There are several factors at play, not least that the ranking looks at multi-generational family businesses.
Basically, no tech businesses qualify on that front. The tech industry also requires a lot of upfront capital spending, and those that make it get to market quickly and scale up as fast as they can. Family businesses tend to grow using internal resources. Families that do have capital to invest often balk at burning money made in a stable industry on a long shot.