Succession looms for Latin American families swaying $3 trillion

Agustin Coppel Gomez was born into one of Mexico’s greatest retailing fortunes, but he has a lot of company.

He and his three siblings are among 31 third-generation descendants of the family’s late patriarch, Enrique Coppel Tamayo, who founded the business in 1941 and later introduced a credit card so that his working-class customers could buy clothes and furniture at his stores.

Agustin is one of the few of his cohort who has worked in the family company, Grupo Coppel, most recently at its banking unit. The fourth generation, with some 70 members, is even less involved, with many pursuing their own ventures or philanthropic initiatives.

“It’s challenging to work in the business, challenging to report to family members,” Agustin, 33, said in a recent interview in Mexico City. “If you want to do it, you’re welcome, but it’s going to take time to go through the ranks and learn.”

Family dynasties are the backbone of Latin America’s economy, accounting for 75% of the region’s firms valued at $1 billion or more and driving 60% of the region’s gross national product, equal to about $3.2 trillion. Yet they’re noticeably less adept when it comes to putting succession plans in place, with almost two-thirds eventually being wound down or sold by founders and less than 15% seeing a third-generation family member lead the company, according to a report by French business school INSEAD.