3 questions to smart minds

Minority shareholders strike a chord with entrepreneurs

For this 3 questions to Sébastien Neiss

Crédit Mutuel Equity
20. May 2020

For medium-sized compa­nies, well-capi­­ta­­li­­zed mino­rity share­hol­ders offer many advan­ta­ges. Finan­cial inves­tors, on the other hand, tend to dislike such invest­ments because they allow only limi­ted control over the company. In France, the model is nevert­hel­ess wide­spread — far more so than in Germany. Does it also promise success in this country?

For this 3 ques­ti­ons to Sébas­tien Neiss, Germany Mana­ging Direc­tor of Crédit Mutuel Equity

1. The invest­ment focus of Crédit Mutuel Equity is on mino­rity invest­ments. Why are mino­ri­ties attrac­tive to you?

Because we have been successful with it for more than 35 years! France, like Germany, has an abun­dance of successful compa­nies, some of them global leaders in their niche, that are looking to grow further with a part­ner. All major French banking groups ther­e­fore main­tain such an invest­ment busi­ness. This market has a volume of about 8–10 billion euros in France. With more than three billion euros, Crédit Mutuel is the biggest player here. We invest 100 percent Crédit Mutuel Group equity. In this way, we are inde­pen­dent of third-party inves­tors and very flexi­ble in terms of the holding period; we also do not have to follow third parties in terms of expec­ted returns. We look for profi­ta­ble compa­nies with growth poten­tial and successful manage­ment that we believe in, and we are inves­ted there for an average of eight years, often signi­fi­cantly longer.

2. How is this model being recei­ved in the German market?

Very good. We have alre­ady comple­ted five tran­sac­tions in around two years. Our ‘pati­ent capi­tal’ strikes a chord with entre­pre­neurs and busi­ness fami­lies looking for a long-term part­ner. We offer more than just capi­tal, namely the know-how and the network of rela­ti­onships from more than 350 invest­ments, most of which are loca­ted in Europe and North America. This allows us to help entre­pre­neurs grow without them having to relin­quish control of the company they have foun­ded. This allows them to carry out projects that they would not have been able to do on their own, or would have been slower to do, or to put aside some of their capi­tal to provide for their family. Some­ti­mes it is contrac­tually agreed that the entre­pre­neurs them­sel­ves can take over our share again one day. In this way, we help them bridge the gap until the next gene­ra­tion or an exter­nal succes­sor takes over. We also like to reinvest in compa­nies that are successful and that we alre­ady know well.

3. You star­ted in Germany in 2018 under the name CIC Capi­tal, and since the end of 2019 you have been opera­ting under the Crédit Mutuel Equity brand. What is behind this change?

CIC Capi­tal was estab­lished as a brand for the markets outside France. Our actual name, CM-CIC Inves­tis­se­ment, has always been diffi­cult to prono­unce. With Crédit Mutuel Equity, we have unified our presence, inclu­ding for Switz­er­land, the USA and Canada. The new name expres­ses even more precis­ely what we do: we invest equity of the banking and insu­rance group Crédit Mutuel. And it brings us closer to the parent company with its coope­ra­tive values. Crédit Mutuel is one of the most popu­lar brands in French finance, enjoy­ing extre­mely high pres­tige and trust. We are ther­e­fore very proud to bear this name. In France, the name change is also accom­pa­nied by a tangi­ble change: Crédit Mutuel Equity will also make infra­struc­ture invest­ments there in the future — by means of a fund in which third parties will also parti­ci­pate. In Germany, howe­ver, this will not play a role for the time being; here, we will initi­ally conti­nue to concen­trate on expan­ding and buil­ding up our direct invest­ment port­fo­lio of medium-sized companies.

About Crédit Mutuel Equity

At Crédit Mutuel Equity, the focus is on the rela­ti­onship and close coope­ra­tion between the expe­ri­en­ced invest­ment team and the execu­ti­ves in the port­fo­lio compa­nies. With the long-term perspec­tive of a fund-inde­pen­dent “ever­green” approach, Crédit Mutuel Equity has alre­ady been successful for 35 years. Tradi­tio­nally, the company assists entre­pre­neurs in parti­cu­lar as a mino­rity share­hol­der, provi­ding pati­ent capi­tal without a prede­fi­ned invest­ment hori­zon and actively parti­ci­pa­ting in the deve­lo­p­ment of the company, but also takes majo­rity stakes.
Crédit Mutuel Equity curr­ently invests around 3.0 billion euros of Crédit Mutuel Group equity, and the port­fo­lio curr­ently consists of around 360 compa­nies. Under the Crédit Mutuel Equity brand, acti­vi­ties have been exten­ded to Canada (Mont­real, Toronto), the United States (New York, Boston), Germany (Frank­furt), Switz­er­land (Geneva, Zurich) and the United King­dom (London).

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