Private Equity

Portrait of Stefan Janke

The private equity sector is strongly affected by economic fluctuations. Funds need transparent solutions on how to develop new growth paths by optimising costs and improving performance. We support investors and portfolio companies in their portfolio management.

Stefan Janke

Stefan Janke

Director

From regulation to returns - investing in transition

Flexible, innovative, digital and crisis-resistance - portfolio companies today must fulfil these four key requirements simultaneously. High investment costs, rising interest rates and market crises pose challenges for investors. Striking the right balance between short-term effectiveness and long-term competitiveness is crucial - but how does this look like?

Current situation in the industry

01

Defying global crises with agility

Whether automotive, consumer goods or mechanical and plant engineering - the private equity environment is amid multitude of challenges characterized by geopolitical and economic tensions. Despite the existing uncertainties and challenges posed by the pandemic, geopolitical conflicts and cost increases (interest rates, personnel and energy), opportunities continue to arise, particularly in the areas of performance improvement and working capital management. Despite the current challenges, private equity investments have so far proven to be agile and innovative, with funds adapting their portfolios at an early stage, regulating and utilizing opportunities to shape a sustainable future.

We support the development of competitive concepts and plan required transformation processes. Maximizing efficiency while maintaining flexibility is a challenge that we solve with target-driven financial and performance management measures. Our robust analyses, e.g. of the market and competition, operational processes, and regulatory requirements, prevent negative developments and ensure that there are no surprises when it comes to refinancing.

Gero Güllmeister

Gero Güllmeister

Partner
02

Streamlining portfolios in times of crisis

Increasing challenges due to persistently high energy costs, interest rate increases, and difficult macroeconomic influences are reducing returns - in some cases permanently. Recognizing the most favorable point of time to sell a portfolio company and being as well prepared as possible for this contributes significantly to a successful process with the highest possible sales price. The efficient structuring of the portfolio streamlining frees up resources to promote healthy and promising portfolio companies and strengthens the sustainable return of the portfolio.

The decision to sell a portfolio company must be carefully considered and, in particular, the options must be analyzed and validated transparently. Whether restructuring with subsequent sale or fire sale, we support you in the decision-making process and provide you with the necessary transparency so that you can base your decision on clearly structured arguments both internally and externally. A financial factbook or vendor due diligence provides the ideal basis for the further process and for entering into discussions with investors. In addition, our transaction PMO supports the streamlined management of the sales process in all its complexity and thus contributes to a process that uses as few resources as possible to maximize the return on sale.

Stefan Janke

Stefan Janke

Director
03

(Re-)financing in the turnaround

Refinancing of expiring loans in times of high key interest rates, risk premiums and operational challenges requires early, efficient, and customized preparation. The timely initiation of the process and coordination with the financiers ensure the smoothest possible transition of debt financing. While ad hoc financing ties up resources in an inefficient process, timely preparation and professional management of the refinancing process allows employees to focus on the important operational challenges of the current crises.

What options are there for a (re-)financing at portfolio companies? Are there show-stoppers that may lead to rejection by lenders? Is procedural and documentary preparation for a (re-)financing in place? Considering a more difficult financing landscape, lenders are increasingly reluctant to approve new or follow-up financing. We support you in customized preparation by creating the necessary transparency with regard to short-term and medium-term liquidity prospects, operational hurdles, economic pitfalls and process moderation in order to ensure maximum chances of successful (re-)financing.

Maximilian Schuh

Maximilian Schuh

Senior Manager

Success Stories

  • Mechanical/plant engineering

    Repositioning a market leader

    FTI-Andersch supported the management under the leadership of Ralf Haspel with precise analysis and global strategy to sustainable turnaround and increased company value.

    More
  • In addition to the high level of commitment and professionalism, I particularly appreciated the focus and the efficiency of the collaboration with FTI-Andersch. Within a short period of time, the team clearly worked out the core statements and thus decisively contributed to the stability of the financing process.

    Xu Tao

    Xu Tao

    Group CFO, Pacoma, Manufacturer of hydraulic cylinders
  • Industrial equipment supplier

    FTI-Andersch supported MAX Automation in the refinancing of the existing syndicated financing in the amount of € 190 million and contributed to the success of the negotiations through targeted analyses and presentations as well as content-related input. During the mandate, the cooperation was always characterised by mutual trust, openness and professionalism.

    Dr. Christian Diekmann

    Dr. Christian Diekmann

    CEO/CFO, MAX Automation, Industrial equipment supplier
  • Industrial Automation and Trade

    The FTI-Andersch team has always supported us in a solution-oriented, pragmatic and efficient manner. Together we managed to realise the necessary refinancing. This has brought our company forward sustainably.

    Richard Mayer

    Richard Mayer

    Geschäftsführer/CFO, Blumenbecker, Industrial automation and trade
  • Consistent performance increase

    The team at FTI-Andersch worked in partnership to support us in reviewing our ways of working in the plants, our site network and the existing Operational Excellence program. The findings from the project were jointly reflected upon and integrated into the existing performance improvement program. To guarantee transparent and quantifiable implementation, FTI-Andersch actively supported us in implementing a program management organization.

    Michael Lindner

    Michael Lindner

    Board of Directors (Production), Linde + Wiemann, Automotive Supplier
Services

A look at the details - what we do for private equity:

Expert Interview

What challenges do private equity companies face, Stefan Janke?

Operational improvements across portfolios or an individual approach to the overall management - what tactics are required to ensure efficient value creation in the companies in time of increased tensions?

The question of strategy for securing value creation in companies requires a differentiated approach. The most important factor for increasing the value of portfolio companies during the holding period is not financial but operational improvements. The range of possibilities has grown enormously in recent years. FTI-Andersch identifies levers for adapting technological innovations, streamlining and improving operating costs/processes or optimizing working capital. We always keep an eye on the success of the portfolio company and draw on many years of industry-wide experience. While in the consumer goods industry we focus on improved inventories and adapted receivables management, for companies in the automotive industry we primarily analyze production processes. These steps can free up cash for investment or debt reduction and help production to catch up with Industry 4.0 to gain a competitive advantage. Each portfolio company and each sector must be considered individually on a case-by-case basis in order to activate the appropriate levers.

Which levers can private equity funds use to establish more transparency in their portfolio companies?

Increasing transparency remains essential for a fund to measure the activities and successes in the portfolio. The introduction and regularity of meaningful reports is of the utmost importance for this. All managers in the company must be just as involved in this as those responsible at the PE companies. The development of the KPIs collected can only be analyzed and assessed in a dialogue. In terms of timing, these levers must be implemented at an early stage to guarantee the success of the investment. Effective reporting and meaningful overview cockpits based on digital platforms are required to successfully implement measures. We always work together with our digitalization team to achieve a measurable increase in transparency.

What shifts can the private equity market expect in the coming years? Are the causes already known today?

Our industry reports are often a point of contact for companies and funds to talk about the future. The market for private equity investors continues to grow. In 2023, growth has cooled down significantly compared to the successful past few years. Nevertheless, the sector is growing and is constantly pooling further financial resources. A volume of USD 5.8 trillion is expected by 2025 (2019: USD 4.5 trillion). Approaches such as the continuing trend towards internationalization are driving the market and opening up new avenues. This has two meanings:

Funds can no longer just increase the value of their portfolio in their home country through acquisitions and transactions, however, can also expand internationally.

And it is no longer just domestic capital providers that are competing for potential deals, but a much broader environment of international funds and institutions. The introduction of active monitoring processes also makes it possible to manage investments from abroad. Accordingly, there is no alternative to structured and transparent monitoring.

PE Diversity Performance Index in cooperation with the HHL Leipzig Graduate School of Management

Your Contacts

How we help our clients