3 questions to smart minds

Strategies in deal sourcing

For this 3 questions to Christian Näther

Photo: Chris­tian Näther
2. July 2014

Private equity inves­tors pursue diffe­rent stra­te­gies in deal selec­tion. The good situa­tion on the finan­cing market ensu­res high entry prices and requi­res a watchful eye on the credit cycle. As a result of the fact that finan­cing part­ners have become much more selec­tive and focus on speci­fic seltors, some argue for grea­ter specialization. 

For this 3 ques­ti­ons to Foun­ding part­ner of EMERAM Capi­tal Part­ners in Munich

1. Curr­ently, prices for targets are rela­tively high. How can such purchase prices be finan­ced at all and corre­spon­ding returns achieved?

Looking at target prices only from an abso­lute perspec­tive is too short-sigh­ted. Rather, it is a matter of using one’s own indus­try exper­tise to iden­tify value levers in compa­nies that are not obvious. Thus, despite an appar­ently high purchase price, very attrac­tive returns can still be achie­ved. EMERAM Alpha Scoring is used to find these undis­co­vered poten­ti­als. Alpha scoring allows us to iden­tify impro­va­ble func­tions in the company or unused fields in the market in advance of the actual tran­sac­tion. This is because many compa­nies do not operate opti­mally in all areas of their value crea­tion and thus have growth poten­tial, for exam­ple. in the area of marke­ting, but also through inter­na­tio­na­liza­tion or by imple­men­ting a buy and build stra­tegy. Through alpha scoring, we iden­tify a target’s under mana­ged areas and blind spots before we sign, and are imme­dia­tely ready to make the company perma­nently better after the acquisition.

2. What focus have you set as your goal? What deals have you made so far? How do you manage to get the deals?

EMERAM is a mid-market fund focu­sing on the five sectors Consu­mer, Retail, Indus­try, Busi­ness Services and Health­care. In Consu­mer and Retail, we have made three deals in recent months, as we have iden­ti­fied very good targets here with Boards and More, Bench and Hussel, which we are now syste­ma­ti­cally deve­lo­ping further toge­ther with the respec­tive manage­ment teams.

In parti­cu­larly liquid times, such as we are curr­ently expe­ri­en­cing, compe­ti­tive pres­sure natu­rally increa­ses, espe­ci­ally for those who cannot gene­rate deals them­sel­ves but have to rely on auctions.

EMERAM has ther­e­fore focu­sed from the begin­ning on deve­lo­ping non-stan­dard and proprie­tary deal flow. The basis for this is the combi­ned 120 years of private equity, consul­ting and manage­ment expe­ri­ence of the six foun­ding part­ners, as well as our networks that have grown over deca­des. We focus on situa­tions in which we can create real added value for a company with the EMERAM Edge. Again, that does­n’t mean we don’t parti­ci­pate in auctions, but we are able to create a variety of deal oppor­tu­ni­ties on a perma­nent basis, which gives us the ability to select the truly best ones.

3. Emeram Capi­tal Part­ners is a young fund mana­ger, only 2 years on the market. Which compe­ten­cies do you bundle in your team accor­ding to your focus?

EMERAM is a First Time Fund, but it is anything but a First Time Team. As alre­ady mentio­ned, the six foun­ding part­ners have deca­des of expe­ri­ence in private equity, as well as strong opera­tio­nal exper­tise in senior manage­ment and advi­sory roles. This combi­na­tion enables us to analyze even complex situa­tions from diffe­rent angles and to call in the most suita­ble experts. Based on our findings, we can then act quickly, in a struc­tu­red and relia­ble manner. Whereas private equity used to be charac­te­ri­zed to a not incon­sidera­ble extent by finan­cial engi­nee­ring, today more than ever distinc­tive exper­tise in the struc­tu­ring of complex tran­sac­tions, but also entre­pre­neur­ship, opera­tio­nal exper­tise and stra­te­gic fore­sight are in demand. Since EMERAM combi­nes all these compe­ten­cies, others also see us as a highly quali­fied part­ner, on the way to beco­ming a local cham­pion in the mid-market segment.

Subscribe newsletter

Here you can read about the latest transactions, IPOs, private equity deals and venture capital investments, who has raised a new fund, how Buy & Build activities are going.

Get in touch

Contact us!
fyb [at]