By Laurent CAIZERGUES*
An entrepreneurial heritage is not only judged by its value or its performance. It must be able to absorb a decrease in dividends, a currency shock, the founder’s incapacity, or the exit of a shareholder without selling the strategic asset in urgency.
African family fortunes are often concentrated in the business, real estate, and unlisted investments. This structure generates long-term value, but makes liquidity, currencies, and governance more crucial than the performance of an isolated portfolio. Therefore, the right diagnosis consists of subjecting the heritage to rupture scenarios.
1. Liquidity test
What needs to be covered if dividends stop for a year? What expenses, debts, guarantees, and transmission operations are due? Which assets are actually sellable, within what timeframe, and with what discount? A high net worth does not protect against a lack of synchronization of cash flows.
The answer lies in a liquidity scale: immediately available resources, negotiable assets, confirmed lines, and strategic assets that should not be sold. The relevant level depends on the lifestyle, commitments, and cyclicity of the business.
2. Currency test
It is necessary to distinguish between the currency of the activity, family expenses, debt, and long-term investments. A family can be diversified by country while remaining exposed to the same currency shock. The goal is not to predict markets, but to align currencies of income, debt, and foreseeable expenses as much as possible.
3. Guarantees test
Personal guarantees, pledges, credits backed by portfolios, and commitments to related companies must be consolidated. An unused guarantee remains a risk. It reduces investment capacity and can transmit a business shock to private heritage, or vice versa.
4. Governance test
Who decides in case of founder’s incapacity? Who holds the access, mandates, and information? Are the roles of family member, shareholder, and manager separate? A sophisticated heritage remains fragile if no body can act quickly and legitimately.
The minimal setup involves delegations, voting rules, dividend policy, conflict resolution mechanism, and information schedule. The documents must be accessible, up to date, and understood by those who will have to use them.
5. Exit and transmission test
What happens if an heir does not want to remain in the capital? Is there a valuation method, financing, and buyback schedule? The transmission must also separate salaries, shareholder income, and private needs. Without a liquidity mechanism, family equity can become a threat to the business.
Three dashboards, one strategy
The family office consolidates three views: net worth, cash flow, and risks. It then coordinates legal, tax, banking, and investment decisions. Its role is not to add vehicles, but to ensure that each structure has a consistent purpose, governance, and documentation.
Return measures one year; stress test measures the ability to go through multiple cycles. Family capital becomes resilient when it knows which assets to protect, which obligations to finance, and who can decide when the expected scenario is no longer the one that materializes.
About Laurent CAIZERGUES
Laurent CAIZERGUES is the Africa director of LAPLACE, a brand of the Crystal group. With over twenty years of experience in wealth advisory and private management, he assists entrepreneurs, executives, and families in structuring, governance, and transmission of cross-border heritage.
