AT FIRST glance L’Oreal, Atlas Copco and Heineken may not appear to have much in common, but these are just three of the thousands of public companies that have the founding family as the largest shareholder.

As an equity investor, you have the opportunity to join these families. Before conjuring up an image of siblings warring across a boardroom table it is worth looking at data from Credit Suisse that shows that family-owned companies - defined as those where founding families have a 20 per cent equity stake or voting rights - have outperformed the wider equity market by 3% a year since 2006. The data also shows that these companies had faster sales growth, higher profit margins and used less debt than the wider market. So why might this be?

One advantage that is evident in a well-run family company is the ability and willingness to take the long-term view. Such opportunities are often most attractive at times of stress when economies are slowing, demand fading and asset prices low. A time horizon measured in generations rather than quarters and the financial flexibility afforded by maintaining a strong balance sheet gives the resources to follow Warren Buffett’s famous advice of being “greedy when others are fearful”.

Atlas Copco’s acquisition of Edwards Group in 2013 is a case in point. Edwards produces vacuum pumps largely for the semiconductor industry. In 2013 this sector was experiencing a significant downturn. By acquiring the business at a point of stress Atlas Copco was able to acquire at a low valuation. Demand for Edwards’ products has since surged amid strong growth in the semiconductor industry, creating significant value for Atlas Copco shareholders.

Another advantage of a well-run family-owned company is a lower principal-agent problem. This occurs when a principal (shareholders in the case of a public company) delegates to an agent (management), but doesn’t have the full information about how the agent will behave.

In some non-family companies, complicated and overly complex remuneration schemes can be concocted to try and align the interests of shareholders and managers. Some, but not all, are successful in having managers that think like owners and maximise long-term value creation. To state the obvious, the risk that the management is not thinking like an owner is reduced at family-owned businesses.

Not all families are perfect though, so it is vital to know what the motivations of your potential relatives are. The international supermarket chain Casino shows what can go wrong should the interests of minority shareholders and family owners diverge. The Naouri family’s 51% stake in Casino is held in the heavily indebted holding company Rallye, which relied on the dividend from Casino to meet its debt repayments.

In 2015, Casino was paying its dividend out of debt. Rather than cut the dividend and force Rallye into bankruptcy, Casino sold prize assets such as its Vietnam and Thailand operations, which at the time were the fastest-growing and most-profitable countries in the group.

This bought some breathing room for Rallye but severely impacted the long-term potential and value of Casino. Last month, Casino eventually cut its dividend, triggering Rallye to seek bankruptcy protection, but not before minority shareholders suffered significant losses in the intervening period.

There are of course additional potential risks to minority shareholders from investing in family companies. Fiat founder Giovanni Agnelli thought that the ideal board size is an odd number, but three was too many.

However, by meeting and engaging with the family behind the business to understand its motivations investors can unearth companies where the structural benefits of long-term thinking outweigh such risks.

It can pay handsomely to be a distant cousin on the shareholder register.

Angus Tester is an investment manager at Aberdeen Standard Investments.