ACTIVITIES
The Funds will always seek to retain the entrepreneurs and/or key managers as co-investors, in order to ensure the continuity of the success factors which have contributed to the past achievements of their companies. The Funds will ensure the alignment of its interests with those of the management of portfolio companies by encouraging management to participate in the equity of their companies.The Funds invest in small and medium size companies with an average enterprise value usually below 50 mln euro, sales between 10 and 50 mln euro and less than 250 employees.
Target companies are highly profitable with operating margins (EBIT) of at least 10% of sales, at least five years operating history, strong competitive position in their market or niche and scope to grow either domestically or through international expansion.
The Funds seldom invest in early stage ventures. The Funds typically invest on average 5-6 mln euro per transaction.
The pre-requisites for the success of investments are:
Strong competitive positioning
Quality of management
Capability to generate steady predictable cash flows
Balanced financial situation that allows leverage buy-out.
The Funds will mainly invest in companies where the Team believes to be able to add value. The Funds will always be represented on the Board of any company in which they invest. Each Fund board representatives will ensure that all portfolio companies have a strategic plan based on which their performance will be measured. One of the features of Cape’s professional investment style is the hands-on approach, characterized by an involvement in portfolio companies. Cape works closely with management on all strategic and operational issues concerning new products launch and new market development, financial controls, add-on acquisitions and the establishment of permanent overseas manufacturing facilities.
Portfolio companies have particularly benefited from such approach and support in two key areas:
Buy and Build: the Investment Team has extensive experience in supporting add-on acquisitions for portfolio companies (which may require additional equity from the Funds).
Overseas expansion: Cape team has demonstrated capability in working with portfolio companies to develop their business operations in China, India, South America and Europe with manufacturing or commercial start-ups.
