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The first listed private equity company, still going strong | Colm Walsh, ICG | Ep 65

In this episode of Fund Shack, Ross Butler speaks with Colm Walsh, Managing Director of ICG Enterprise Trust. ICG Enterprise Trust is a listed private equity investor managed by ICG, a global alternative asset manager. Colm shares insights on ICG’s investment strategies, including their focus on buyouts, the benefit of being part of ICG’s extensive platform, and the importance of experienced managers in achieving consistent returns. They also discuss the unique advantages of the investment trust structure for private equity and Colm’s perspective on the evolving private equity landscape.

ICG Enterprise Trust and Its Role in Private Equity:
ICG Enterprise Trust is a listed private equity investor focusing on buyouts. As part of ICG’s broader alternative asset management platform, it benefits from access to a vast ecosystem of managers and market insights. ICG Enterprise is the UK’s oldest listed private equity vehicle, having been formed in 1981.

Investment Strategy Focused on Buyouts and Defensive Growth:
ICG Enterprise Trust primarily invests in cash-generative, EBIT-positive companies, favoring the established private equity markets in North America and Europe. They focus on sectors that demonstrate “defensive growth,” such as pet products and fire protection services, which can sustain growth even during challenging economic times.

Diversified Portfolio with Primaries, Secondaries, and Co-Investments:
ICG Enterprise Trust diversifies its investments through a mix of primary fund commitments, secondary investments, and co-investments. Around 30% of the portfolio is tied to ICG’s network, providing Colm and his team with enhanced diligence capabilities, particularly for co-investment opportunities.

Balancing Risk and Return Through Experienced Managers:
Colm emphasizes the importance of backing experienced and established managers who have developed a strong playbook and pattern recognition. This conservative approach is geared towards minimizing loss ratios and achieving consistent returns, appealing to public shareholders seeking stability in private equity.

Advantages of the Investment Trust Structure for Retail Investors:
Colm highlights the unique benefits of the investment trust structure, which allows retail investors access to private equity returns with the liquidity of a public company. This structure has facilitated democratized access to private equity long before recent innovations, such as LTAFs, were introduced.


#PrivateEquity #ICGEnterpriseTrust #AlternativeInvestments #BuyoutInvesting #FundShack #InvestmentTrusts #PublicMarkets #DefensiveGrowth #LPInvesting #AlternativeAssets #PrivateEquityPodcast #RossButler #ColmWalsh #AssetManagement #ICG


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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group


The modern PE COO | Karen Sands, Federated Hermes | Ep 64

In this episode, Ross Butler talks to Karen Sands, COO of Federated Hermes Private Equity which manages some $6bn of AUM. Karen provides insight into Federated Hermes’ shift into private markets, their strategic focus on ESG, and her role in managing operations. They explore the importance of scalable infrastructure, the evolving investor landscape, and the operational challenges faced by private equity firms today.

Detailed Insights:

Federated Hermes and Private Markets:
Federated Hermes transitioned into private markets in 2018 when it acquired Hermes, positioning the firm to grow its ESG and private market offerings. Karen explains that while Federated Hermes had roots in mutual funds and money markets, the integration of Hermes has helped them expand into lower mid-market private equity.

The COO’s Role in Private Equity:
Karen highlights that, as COO, her responsibility extends beyond back-office functions. She collaborates closely with the investment and sales teams, ensuring infrastructure is aligned with investor needs, fund performance, and operational efficiency. The operational backbone is critical to delivering first-class service and maintaining investor trust.

Importance of Data-Driven Operations:
Karen emphasizes the need for a robust, scalable infrastructure. Federated Hermes uses a “target operating model” that integrates data from various systems, providing a comprehensive view of fund-level, asset-level, and investor-level information. This enables the firm to be nimble in responding to investor queries while maintaining efficiency.

Risk Management and Investor Relations:
Operational risk, liquidity management, and transparency are top priorities for Karen. She discusses the importance of having systems in place to handle investor demands, manage cash flow, and ensure the firm’s resilience against macroeconomic shocks like the recent Silicon Valley Bank incident.

Emotional Intelligence in Leadership:
While strong analytical skills are essential, Karen underscores the value of emotional intelligence and relationship-building in leading operational teams. For her, fostering diversity of thought and nurturing strong, empathetic leadership are key components of success.

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#PrivateEquity #FederatedHermes #PrivateMarkets #COOInsights #FundOperations #FundShack #ESGInvesting #ClientRelations #RiskManagement #PrivateCapital #OperationsManagement #privatemarkets #alternativeassets


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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group


Cracking the DC pension market in the UK | Joanna Asfour, Partners Group | Ep 64

Founded in mid-1990s, Partners Group launched its first vehicle accessible to individual investors in the early naughties. Today it is at the frontline of the democratisation of private equity.

In this episode, Ross Butler speaks to Joanna Asfour, the firm’s global head of consultant relations, to discuss how private equity can help DC pensioners in the UK access private markets.

We look particularly at the benefits that private markets exposure can bring to a pension fund, as well as some of the complexities around the management of such less liquid investments. We al LTAFs, the UK equivalent of ELTIFs and the various nuances of providing relatively simple access to the asset class for DC pension trustees.

Top insight
The UK DC market will be worth about a trillion by 2030. It’s a £100bn opportunity for private markets. There’s been sub-£5bn invested so far.
i.e. This is going to be big!

Highlights

Historical Context and Current Position
Partners Group has been a pioneer in making private markets accessible to individual investors since the early 2000s. The firm currently manages around 150 billion euros in assets, with private wealth being a rapidly growing segment.

Democratization of Private Markets
The term democratization refers to broadening access beyond institutional investors to include individuals, such as DC pension scheme members and wealth management clients.
This trend is seen as mutualization, akin to what mutual funds did for public markets.

Regulatory and Operational Challenges
The key challenge has been the regulatory and operational barriers that limit DC pension schemes from investing in private markets.
The introduction of the Long-Term Asset Fund (LTAF) by the FCA has been crucial in providing a UK-authorized fund structure suitable for DC schemes.

LTAF as a Solution:
LTAFs are designed to meet the specific needs of DC pension schemes, allowing them to blend private markets into their default fund arrangements.
This structure addresses both regulatory requirements and the operational demands of life insurance platforms that manage many DC pension schemes.

Implementation Considerations:
Trustees need to consider where in the pension lifecycle private market allocations are most appropriate, particularly focusing on the growth accumulation phase.
There is a need to balance liquidity management and stress test the potential impact of including private markets in DC schemes.

Performance and Valuation:
Performance fees and daily valuations are critical aspects that need to be managed to ensure fair treatment of all investors in an evergreen fund format.
Partners Group has developed robust systems to handle daily valuations and liquidity management, drawing on their long experience with similar fund structures.


#privateequity #democratisation #fundraising #privatewealth #privatemarkets #LTAFs #alternativeassets


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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group


The state of private equity in 2024 | Jim Strang | Ep 62

Jim Strang, serial private equity NXD and chairman of Hg Capital Trust, discusses the complexities of the private equity landscape on the Fund Shack podcast.

Fundraising and Market Dynamics: Market Polarization: Large platforms and top-performing specialists continue to raise significant capital, while mid-sized players face extended fundraising cycles.

Liquidity Challenges: Investors are managing overexposure from the 2021 boom, causing liquidity issues across different regions.

GP Strategy and Growth: Clear Ambitions: GPs focus on defining clear ambitions and achieving team alignment.

Strategic Growth: Balancing ambition with operational capacity, strategies range from maintaining a single focus to expanding into adjacent areas through M&A.

Wealth Market and Semi-Liquid Structures

Growing Market: Wealth market growth through semi-liquid structures designed for high-net-worth individuals.

NAV-Based Exposure: These structures offer accessible entry points for private market investments, requiring careful liquidity management.

ESG and Cybersecurity: Central to Strategy: ESG considerations driven by investor demand and talent acquisition needs.

Top Risk: Cybersecurity remains a top risk, with firms prioritizing mitigation measures to protect portfolios.


Thank you to our episode partner Quest Fund Placement.

The firm recently launched QuestInvest, the digital hub and gateway to alternative assets that connects accredited investors with leading GPs.

For more information, please visit https://www.questfundplacement.com


#privateequity #fundraising #wealthmanagement #esg #cybersecurity #privatemarkets

#capitalmarkets #alternativeassets


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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group


Fundraising masterclass | Sunaina Sinha, Raymond James | Ep 61

Sunaina Sinha, Global Head of Private Capital Advisory at Raymond James, talks to Ross Butler about the challenges of raising private capital funds in today’s market. Tl:dr – it’s not easy.

This episode is supported by Datasite,  the leading M&A platform for dealmakers. https://www.datasite.com/en

Fundraising cycles have extended to 22-23 months on average, reflecting the challenging environment. Firms must offer co-investments, fee discounts, and management fee holidays to attract investors. The tenor of fundraising conversations has shifted, with private equity firms needing to provide various incentives to secure commitments.

We cover dry powder, the rise of co-investments, and the influence of Middle Eastern and private wealth in the market.

2023 was marked by significant challenges due to a liquidity squeeze and reduced exit activities. 

This environment has been tough for institutional limited partners, leading to a shift in investment metrics. (i.e. DPI is the new IRR)

Rise of Co-Investments

How investors are leveraging their power to demand fee-free co-investments.

Sector Focus: Private Credit and Infrastructure

Private credit is booming due to bank pullbacks and high-interest rates, while infrastructure investments are attractive due to their tangible nature and inflation resistance. 


Thank you to our episode partner Datasite, the leading M&A platform for dealmakers.

For more information, visit: www.datasite.com

#wheredealsaremade


#privateequity #fundraising #raymondjames #investmentstrategies #marketdynamics #businessstrategy


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Contact Information: About Fund Shack: Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group.
Contact:
Katie Mitchell
Email: katie@linearb.media
Company: Linear B Group


US mid-market investing | Patrick Turner, VSS Capital Partners | Ep 60

Ross Butler hosts Patrick Turner, Managing Director at VSS Capital Partners, a US-based lower mid-market private equity firm founded in 1981, originally named Veronis Suhler Stevenson. Patrick joined VSS in 2014, bringing a wealth of experience from his extensive career in leveraged buyouts in the US, and private equity in China. VSS focuses on the US lower mid-market, specifically targeting three verticals: education, healthcare, and outsourced business services with a technology angle. VSS’s approach to structured capital, which includes debt, preferred equity, and equity, tailored to the needs of founders looking to grow their businesses without giving up control. This strategy allows VSS to be competitive and less dilutive compared to traditional growth capital.


Key Highlights:

VSS focuses on the US lower mid-market, specifically targeting three verticals: education, healthcare, and outsourced business services with a technology angle. VSS’s approach to structured capital, which includes debt, preferred equity, and equity, tailored to the needs of founders looking to grow their businesses without giving up control. This strategy allows VSS to be competitive and less dilutive compared to traditional growth capital.


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#privateequity #venturecapital #MidMarket #StructuredCapital #privatecredit #leveragedbuyouts #growthcapital #BusinessServices #HealthcareInvestment #EducationInvestment #TechInvestment #AlternativeInvestments #podcast


Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group



Venture capital’s crème de la crème | Fatou Diagne, Bootstrap Europe | Ep 59

Fatou Diagne is co-founder of Bootstrap Europe, which acquired the German portfolio of Silicon Valley Bank in 2023. The discuss is a fascinating insight into the elite world of lending to the top tier of venture-backed businesses.


This episode also features our supporters, RW Blears, a UK law firm specialising in fund management. If you are a UK venture capital manager or growth investor and need a trusted legal adviser, visit https://blears.com/


In this episode of the Fund Shack podcast, 🎙️ Ross Butler interviews Fatou Diagne, co-founder of Bootstrap Europe. Fatou offers a compelling look into the world of venture debt, focusing on its role in funding high-growth technology businesses and its strategic advantages compared to traditional equity financing.

Key Highlights:

Introduction to Venture Debt: Fatou Diagne explains that Bootstrap Europe provides debt funding to technology companies that have already received substantial equity investment. These companies are usually 5 to 7 years old, generating revenues of 5 to 20 million euros, and are backed by top-tier venture capital funds.

Target Companies: Bootstrap Europe targets mature technology companies that have a proven growth formula but prefer not to dilute their equity further. The firm focuses on sectors like semiconductors, life sciences, and energy transition, seeking to support technologies that can significantly impact society.

Venture Debt is way cooler than you think! Fatou clarifies that venture debt is often misunderstood. It is not a last resort for companies that cannot raise equity; instead, it is a strategic choice for well-capitalized companies looking to accelerate growth without further dilution.

Deal Flow and Timing: Bootstrap Europe follows potential investment opportunities for several years, waiting for the right inflection point to provide growth debt. The firm typically invests after one or two rounds of equity funding, although this can vary.

Benefits for Companies: The main advantage for companies using venture debt is the avoidance of dilution. Founders and early-stage investors can maintain larger stakes in the company, enhancing their returns upon exit.

Terms of Venture Debt: The terms are transparent, with interest rates typically around 8-10% over the base rate. The debt is repaid over 3-4 years, with monthly payments of interest and principal.

Bootstrap Europe’s Approach: The firm emphasizes a strong relationship with portfolio companies, focusing on providing support during both good and challenging times. They prefer to work closely with management teams to navigate growth and financing challenges.

Acquisition of Silicon Valley Bank’s German Portfolio: In 2023, Bootstrap Europe acquired the German portfolio of Silicon Valley Bank. Fatou discusses the strategic and operational steps taken to complete this acquisition, emphasizing the importance of speed and expertise.

Current Market Conditions: Fatou comments on the impact of global economic challenges on the tech sector, noting that while the market has cooled, there are still many high-quality investment opportunities. She highlights the importance of well-capitalized companies that can navigate difficult conditions to gain market share.

Future Growth and Challenges: The discussion touches on the growth potential of venture debt in Europe and the challenges of increasing market penetration. Fatou believes that with more education and understanding, venture debt can become a more prominent part of the funding landscape.


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 #venturecapital #privateequity #techfunding #growthcapital #startupfunding #venturedept #EquityFinancing #debtfinancing #innovationtechnology #techinvesting #podcast #BusinessPodcast #FinancePodcast #Entrepreneurship #ThoughtLeadership


Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group



Corporate venture capital | Mike Smeed, Jaguar Land Rover | Ep 58

Mike Smeed is managing director of InMotion Ventures, the corporate venturing arm of Jaguar Land Rover.

In this episode of the Fund Shack podcast, he speaks to Ross Butler about what the company looks for in start-up candidates and the rapidly evolving nature of corporate venture capital.

Mike the Managing Director of InMotion Ventures, the corporate venture capital (CVC) arm of Jaguar Land Rover (JLR). Mike discusses his career background, including roles at a Shanghai-based joint venture and Walgreen Boots, and delves into the unique aspects of CVC compared to traditional venture capital (VC).

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Key Highlights:

Corporate Venture Capital (CVC) vs. Venture Capital (VC):

  • Similarities: CVC and VC both perform due diligence, focus on valuation and metrics, and aim for strategic investments.
  • Differences: Historically, CVCs were viewed skeptically due to fears of corporate overreach. Modern CVCs have adopted VC professionalism and often invest off their parent companies’ balance sheets, with some even taking external capital.

Role of InMotion Ventures:

  • Strategic Focus: InMotion Ventures aims to accelerate innovation and support JLR’s strategic transformation, especially in areas like climate, industrial, and enterprise technologies.
  • Investment Approach: Unlike many CVCs, InMotion invests in early-stage startups (seed to Series A) to add significant value to both JLR and the startups.

CVC Evolution:

  • Professionalization: Many CVCs now operate with the same rigor as traditional VCs, including thorough background checks and strategic valuations.
  • Integration with Parent Companies: CVC leaders often come from within the parent company, blending corporate insight with investment acumen.

Strategic Mandate:

  • Innovation and Collaboration: InMotion Ventures aims to help JLR achieve carbon neutrality by 2039 and focuses on technologies critical to this transformation.
  • Partnerships: The firm prefers co-investing and does not lead funding rounds, maintaining about a 5% equity stake to ensure active involvement without overwhelming influence.

Investment Justifications:

  • Ecosystem Access: Being an active investor attracts other investors and startups, facilitating ecosystem engagement.
  • Innovation and Speed: Investing in startups accelerates innovation and market readiness, providing JLR with early access to cutting-edge technologies.
  • Capital Efficiency: Strategic investments leverage larger rounds by financial VCs, maximizing impact with relatively small contributions.

Success Stories and Examples:

  • Investments: Mike discusses successful investments, such as in companies developing head-up displays and augmented reality technologies.
  • Collaboration with Competitors: InMotion Ventures collaborates with other automotive giants like Volvo and BMW to co-invest in promising technologies.

Value to Startups:

  • Strategic Support: Startups benefit from JLR’s extensive resources, including engineering expertise and testing facilities.
  • Mutual Benefits: While InMotion seeks financial returns, the primary goal is strategic alignment with JLR’s broader goals.

The interview highlights the evolving landscape of CVC, emphasizing strategic partnerships, professional investment practices, and the mutual benefits of fostering innovation within large corporate structures. Mike underscores the importance of balancing financial returns with strategic goals to drive both corporate growth and startup success.

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#Innovation #Technology #DigitalTransformation #VentureCapital #Startups #Entrepreneurship #CorporateVenture #AutomotiveIndustry #Sustainability #FutureOfMobility #BusinessGrowth #EmergingTechnologies #Industry40 #TechInvestments

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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group

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Renewables, infrastructure and international equity | Bernard Fairman, Foresight Group | Ep 57

Foresight Group was a pioneer in renewable energy investment back in the 1990s. Today, it is a diversified investment group listed in London. Its founder and chairman, Bernard Fairman, talks to Ross Butler about

  • Its expansion into global infrastructure;
  • Why he favours hydrogen over electric, and
  • His plans to build out the firm’s UK venture investment arm into an international-regional growth equity franchise.

RW Blears: Our sponsor for this episode is RW Blears, a UK law firm specialising in fund management. If you are a UK venture capital manager or growth investor and need a trusted legal adviser, visit https://blears.com/


Fund Shack podcast, host Ross Butler interviews Bernard Fairman, the Executive Chairman of Foresight Group. Bernard discusses the evolution and growth of Foresight Group, a sustainability-led investment manager co-founded by Bernard in 1984 and listed on the London Stock Exchange in 2021. The conversation covers various aspects of the business, including infrastructure, private equity, and capital management.

Key Highlights:

Company Evolution:

  • Foresight Group started with a focus on venture capital but shifted to renewable energy infrastructure around 2006, foreseeing solar energy as the cheapest form of energy due to Moore’s Law.
  • The company now also focuses on hydrogen as the next significant step in the energy transition.

Private Equity Strategy:

  • Foresight Group has become one of the largest regional private equity players in the UK by partnering with local authority pension funds.
  • The company aims to invest in local businesses to create jobs and generate regional wealth.

Investment Approach:

  • The firm’s strategy includes investing in renewable energy projects and regional private equity deals.
  • Bernard emphasizes the importance of scale in renewable energy to drive down costs and the role of government policies in supporting industry growth.

Challenges and Opportunities:

  • Bernard discusses the competitive landscape of infrastructure investment and the convergence of private equity and infrastructure skills.
  • He highlights the massive opportunities in solar energy and the energy transition, predicting it to be a multi-trillion dollar industry.

Future Goals:

  • Foresight Group aims to significantly expand its infrastructure business and possibly enter international markets, starting with raising local funds before expanding further.

Market Insights:

  • Bernard provides insights into the challenges of electric vehicles, emphasizing the need for coherent government energy policies and the regressive impact of rapid transitions without proper planning.

Listing on the Stock Exchange:

  • The listing on the London Stock Exchange has increased the company’s visibility but has not been effective as an acquisition currency due to low market liquidity.

#Sustainability #RenewableEnergy #VentureCapital #PrivateEquity #SolarEnergy #HydrogenEconomy #InvestmentManagement #InfrastructureInvestment #CleanTech #EnergyTransition


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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group


Central Europe buyouts: a surprisingly big opportunity | Robert Knorr, MidEuropa | Ep 56

MidEuropa pioneered private equity buyout investing in Central Europe, launching in 1999. Robert Knorr has been a partner since 2007. He was recently awarded Private Equity Mid Market Leader of the Year at the Real Deals private equity awards for his pivotal role in investment in the region. In this podcast he talks to Ross Butler about opportunities from Poland to the Med, and a very big win in Romania with Profi.


Key Highlights

In this episode of the Fund Shack podcast, Ross Butler interviews Robert Knorr, Managing Partner at MidEuropa, to explore the firm’s pioneering role in private equity investment across Central Europe. MidEuropa, established in 1999, has become a key player in the region, transitioning from venture capital to buyout funds. The discussion highlights their strategic focus on sectors such as consumer goods, healthcare, and technology, emphasizing the importance of sustainability and digitalization in their investment strategies.

Private Equity and Buyout Funds: MidEuropa has been instrumental in shaping the private equity landscape in Central Europe. Their transition from venture capital to buyout funds has been a strategic move to capitalize on the region’s economic development and emerging markets.

Investment and Economic Development: The firm’s investments have significantly contributed to the economic transition and development of Central European countries, integrating them into the broader European Union market.

Sector Focus: MidEuropa targets consumer goods, healthcare, and technology sectors, areas that offer high growth potential and align with their strategic investment goals. Sustainability and Digitalization: Emphasizing sustainability, MidEuropa promotes energy transition and sustainable practices. They also leverage digitalization to enhance business services and operations.

Corporate Carve-Outs and Cross-Border Investments: The firm has successfully executed corporate carve-outs and cross-border investments, demonstrating their expertise in managing complex mergers and acquisitions (M&A).

Nearshoring: Leveraging the talent pool in Central Europe, MidEuropa facilitates nearshoring of services, providing cost-effective and high-quality business services.

Financial Returns and Investor Relations: The episode details MidEuropa’s approach to delivering strong financial returns and maintaining robust investor relations.


#privateequity #investment #centraleurope #sustainableinvestment #emergingmarkets #businessgrowth #economicdevelopment #venturecapital #digitaltransformation #infrastructure #telecom #consumergoods #HealthcareInvesting #poland #techinvestments


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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group