On November 14, 2019, Integration participated in the German Private Equity Forum, organized by MergerMarket, in Munich, Germany. Gilberto Sarian, one of Integration’s partners, participated in a panel at the forum alongside Johnny Vega (former Delivery Center Director at Mondelez) and Michael Schumann (Founder and CEO of DUBAG Group). The discussion, which focused on the challenges private equity funds are facing to accelerate value generation in their portfolio companies, was moderated by Catherine Ford.
High-entry multiples and competition for assets are pressuring private equity funds to deliver high returns, requiring administrators to not only leverage financial engineering to increase portfolio value, but to become more innovative in pursuing operational improvements. The panel explored the different platforms available to improve the performance of invested companies, and the participants shared examples and real-life challenges from different sectors. The audience was able to vote throughout the discussion on which strategies they felt would best generate value.
At the end of the panel, the discussions were summarized into three essential points on which private equity companies should focus:
- Guarantee a judicious and diligent pre-deal process, with clear understanding of the levers that will bring true value.
- Ensure a post-merger integration structure that is capable of adjusting quickly to the integration’s reality.
- Pay more attention to human capital, especially the leadership of the new invested company.
The last point, about human capital, was confirmed among both the panel participants but also the audience, the majority of which voted it as the primary focus of private equity funds for invested companies.
For Integration, it was extremely gratifying to hear that the leaders of private equity companies in the DACH region (German, Austria and Switzerland) share this opinion and are focusing on this point, which is a key part of Integration’s differential.