How private equity-savvy are German companies today?
As a global private markets manager, we do not think in country-specific terms. We look at transactions around the world and pick out the most attractive ones, such as Hofmann Menü. A GP or manager focused on a particular region will always tell them that their market is attractive right now. Our global presence with over 700 employees in 16 offices allows us to compare investment opportunities on a global scale and select those with the most attractive risk-return profile. In 2013, we looked at over 3,000 potential direct investments across our four asset classes, Private Equity, Private Debt, Private Real Estate and Private Infrastructure, and invested in 86 of them: 31 in North America, 48 in Europe and 7 in Rest of World. Whether we invest in Germany in 2014 depends purely on the opportunities, but as a global manager we are not forced to invest in Germany. However, I can assure you that we are currently looking at some interesting investment opportunities in Germany.
The company has developed positively and the previous owner Gilde did a good job in our view. Nevertheless, we see great development potential in the company for the future, for example through the development of new customer segments or further internationalization. Our global network and our portfolio of more than 3,000 companies also help in this process. Among them are of course also segments and companies that could be supplied by Hofmann Menue Manufaktur in the future.
Due to the positive development in the PE market and the increasing professionalization in our industry, there are indeed many companies and also management teams with longer PE experience. Against this backdrop, we will increasingly see secondary and tertiary buyouts. FTE Automotive, Kautex Maschinenbau, ISTA are just some of the examples from the past year.
Meanwhile, it is also no longer a secret that investors even achieve slightly higher returns with secondaries than with primary buyouts. This is partly due to the fact that PE experienced companies have a proven business model, professional monitoring and reporting systems. On the Partners Group side, we have had very good experience in secondary buyouts worldwide, as we have also been able to leverage our global presence to increase returns through operational value creation, in particular through buy & build/add on strategies and internationalization. This allows locally successful medium-sized companies to be built up into global firms.